40 annual report page 1 - bombay stock exchange€¦ · 1 chairman’s letter to shareholders dear...

ANNUAL REPORT2 0 0 9 - 2 0 1 0

40 thth

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1

CHAIRMAN’S LETTER TO SHAREHOLDERS

Dear Members,

It is with great pleasure that I present to you the 40th Annual Reportof your Company, Aries Agro Limited.

2009-10, the year under review in this Report, was extremely turbulentfor the agribusiness industry, with the macro environment beingburdened with the pressure of dealing with the worst drought in overthree and a half decades, high inflation, stiff monetary policyincreasing the cost of funds, low farm productivity and depletingharvests. Despite this extremely difficult environment, I am proud ofthe efforts of the Aries family, their grit, persistence, faith anddetermination to deal with adversity and thankful for the confidenceof all our external stakeholders which stood firm in these testingtimes, resulting in your company scaling new heights and recordinghigh revenue growth of 27 % and year-on-year profitability growth of14 %. This demonstrates that all of us as a strong, cohesive andfocused team faced the challenges head-on with robust plans andsystematic processes to emerge winners.

The year under review was also historic for your organization as itwas the first full year of functioning as an Indian-born multinational,with an expanded manufacturing base in India and the United ArabEmirates and growing sales in 4 countries overseas. With a totalmanufacturing base of over 1,50,000 MT at 8 locations, your companynow has arguably the largest world class manufacturing base ofspecialty plant nutrition solutions set up by an Indian company. It isthis network of factories producing 76 of our Aries brands that givesus the confidence to serve our customers in India and around theworld.

2009-10 saw a record launch of 15 new products, including 4 India-first concepts of European bio degradable chelates, 5 Natural Aminoacid Chelates, a Marine Plant extract from Norway, a Water Treatmentformulation, 2 Calcium Nitrate derivatives and 2 imported Agriculturalsprayers. The year also saw Aries entering new markets like Keralaand Kashmir. Aries products are currently being sold in 1,75,000villages across 24 Indian states, with distribution access to two outof every three districts of the country.

To complement the traditional trade channel and increase access tounserviced markets, your company has an efficient fleet of 100 KrishiVigyan Vahans that have travelled 11,24,168 kilometers and spreadawareness of specialty plant nutrition concepts in 4,658 villagesspread across 10 States during 2009-10 by conducting farmerbriefings, structured meetings and audio visual presentations,providing advisory services, mobile soil testing and fielddemonstrations. The Aries KVVs were featured by the Wall StreetJournal as one of the most innovative rural brand promotion andeffective extension efforts. We are confident that this fleet of KVVswill further strengthen our consumer connect and enhance brandloyalty and trust.

Your company’s wide product range matches the world’s best andbiggest plant nutrition companies. This vast range of cost-effective,world class products serves a major differentiator as it provides Ariesfarmers with the widest choice of customized plant nutrients, tailor-made for his crop and soil specific needs. Our efforts to furtherenhance this brand portfolio will continue with further research anddevelopment at our own R&D labs and by working with Agricultural

Universities and Research Institutions.

Your company continues to work very hard in ensuring developmentof the rural communities where we work and grow. During the year,we have scaled up our range of Environmentally Sensitive plantnutrition solutions to include natural and bio degradable products inaddition to our flagship brands which are all chemically inert Chelatedmictonutrients. We also promote the use of Water Soluble Packaging.Our strategic CSR initiatives are typically aimed at spreadingKnowledge far and wide in rural areas. This is achieved by workingclosely with the Confederation of Indian Industry’s Young IndianFarmers Network, government and all stakeholders to build acomprehensive, sustained dialogue towards evolving a frameworkfor Indian Good Agricultural Practices (Indo-GAP). In addition,knowledge dissemination activities were undertaken with Ariesbranded programs included Uniconnect – a structured lab to landprogramme that connects university faculty, researchers and studentswith young farmers, Suryodaya– farmers training in local areas andBal Krishak Sambodhan sessions in rural schools – Guest lecturesby experts to expose higher secondary school students to the latestagricultural methods making them ‘future ready’.

We also conducted two very successful National Agromaxconferences in Guwahati, Assam and in Hissar, Haryana. Togetherthese two flagship events had close to 4000 young farmers inattendance and had a galaxy of over 40 speakers and involved CII’sYoung Indians, 5 State Governments, 9 Agricultural Universities andmany agribusiness corporates. Farmers were also provided withcommodity prices, crop advisories and weather alerts throughout theyear using mobile phone text messages. In addition, using ouranalytical labs and mobile soil testing units, over 30,000 soil sampleswere analysed across the country and soil health cards issued tofarmers at subsidized prices. These efforts have not only increasedthe spread of up-to-date information on crop management andintegrated nutrient management in rural India but have been demandcreators for your company’s product range. The success of theseefforts will ensure that we will work to scale them up in the monthsahead.

Your company’s overseas factories are now fully operational for theproduction of Chelates, Soluble Boron and Sulphur Bentonite. TheUAE team is confident that they are fully prepared to meet the demandfor Aries in India and the growing needs of our global customers.

The outlook for the year 2010-11 seems positive with all indicationspointing to normal rainfall. This will certainly have a beneficial impacton your company’s growth and profitability. We are looking at adding3 new plant protection products and 3 new plant nutrition productsduring 2010-11.

I would like to thank each one of you personally for your confidencein Aries. Together, we will ensure that your company grows further inthe year ahead.

Sincerely,

Dr Jimmy Mirchandani

Chairman & Managing Director

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40th Annual Report 2009-2010

40th Annual Report2009 - 2010

HDFC Bank LimitedEmerging Corporate GroupTrade World, ‘A’ Wing, 2nd FloorKamala Mill CompoundSenapati Bapat Marg, Lower ParelMumbai-400 013

Canara BankChembur Main Branch,Opp. Chembur Railway Station70 A, MDS Marg, ChemburMumbai-400 071

YES Bank LimitedNehru Centre, 12th FloorDiscovery of IndiaDr. A. B. Road, WorliMumbai-400 018

BRANCH NETWBRANCH NETWBRANCH NETWBRANCH NETWBRANCH NETWORKORKORKORKORKAhmedabad, GujaratBangalore, KarnatakaBellary, KarnatakaBhubaneshwar, OrissaCoimbatore, Tamil NaduGhaziabad, Uttar PradeshGuwahati, AssamHissar, HaryanaHyderabad, Andhra PradeshIndore, Madhya PradeshJaipur, RajasthanJalandhar, Punjab

MANUFMANUFMANUFMANUFMANUFAAAAACTURING LOCACTURING LOCACTURING LOCACTURING LOCACTURING LOCATIONSTIONSTIONSTIONSTIONSMumbaiBangaloreHyderabadKolkata

REGISTERED OFFICE:REGISTERED OFFICE:REGISTERED OFFICE:REGISTERED OFFICE:REGISTERED OFFICE:Aries House, Plot No. 24,Deonar, Govandi(East),Mumbai-400 043,Web Site: www.ariesagro.com

Jodhpur, RajasthanKolkata, West BengalLucknow, Uttar PradeshNagpur, MaharashtraNashik, MaharashtraNipani, KarnatakaPatna, BiharRaipur, ChhatisgarhRanchi, Jharkhand,Rudrapur, UttaranchalSolapur, MaharashtraSriganganagar, Rajasthan

SanandLucknowSharjah, UAE(Subsidiary Company)

Balance Sheet as atMarch 31, 2010Profit & Loss Account for the year endedMarch 31, 2010with Director’s Report

BOARD OF DIRECTORS:Dr. Jimmy MirchandaniChairman & Managing DirectorDr. Rahul MirchandaniExecutive DirectorDr. D. S. JadhavDirectorProf. R. S. S. ManiDirectorMr. Akshay MirchandaniDirectorMr. C. B. ChhayaAdditional Director (w.e.f. 29.10.2009)

CHIEF FINANCIAL OFFICERMr. S. Ramamurthy

COMPANY SECRETARY & COMPLIANCE OFFICER

Mr. Qaiser P. Ansari

AUDITAUDITAUDITAUDITAUDITORS:ORS:ORS:ORS:ORS:Kirti D. Shah and AssociatesChartered Accountants53, Juhu Supreme ShoppingCentre, 2nd Floor, GulmoharCross Rd. No.9, JVPD Scheme,Mumbai-400 049.

INTERNINTERNINTERNINTERNINTERNAL AL AL AL AL AUDITAUDITAUDITAUDITAUDITORS:ORS:ORS:ORS:ORS:Kirit Manek & Co.Chartered Accountants14B, Nootan Nagar,Turner Road, Bandra(W),Mumbai-400 050

BANKERS:BANKERS:BANKERS:BANKERS:BANKERS:ICICI Bank Ltd.SEG Dept.B Wing 3rd Floor,Mafatlal Chambers,N.M Joshi Marg, Lower Parel (E)Mumbai - 400 013

3

Description Company Page Nos.Notice & Agenda Aries Agro Limited 4-8Directors Report Aries Agro Limited 9-13

Aries Agro Care Private Limited 90Aries Agro Equipments Private Limited 107Aries Agro Produce Private Limited 123

Auditors Report Aries Agro Limited-Standalone 33-37Aries Agro Limited-Consolidated 58Golden Harvest Middle East FZC 77Aries Agro Care Private Limited 91-93Aries Agro Equipments Private Limited 108-110Aries Agro Produce Private Limited 124-126

Reports & Accounts

Balance Sheet as at 31st March, 2010 Aries Agro Limited-Standalone 38Aries Agro Limited-Consolidated 59Golden Harvest Middle East FZC 78Aries Agro Care Private Limited 94Aries Agro Equipments Private Limited 111Aries Agro Produce Private Limited 127

Profit & Loss Account

For the period ended at 31st March, 2010 Aries Agro Limited-Standalone 39Aries Agro Limited-Consolidated 60Golden Harvest Middle East FZC 79Aries Agro Care Private Limited 95Aries Agro Equipments Private Limited 112

Cash Flow Statements Aries Agro Ltd-Standalone 40Aries Agro Ltd-Consolidated 61Golden Harvest Middle East FZC 80Aries Agro Care Private Limited 96Aries Agro Equipments Private Limited 113Aries Agro Produce Private Limited 128

Schedules Aries Agro Limited-Standalone 41-47Aries Agro Limited-Consolidated 62-69Golden Harvest Middle East FZC -Aries Agro Care Private Limited 97-100Aries Agro Equipments Private Limited 114-116Aries Agro Produce Private Limited 129

Notes to Accounts Aries Agro Limited-Standalone 48-55Aries Agro Limited-Consolidated 70-76Golden Harvest Middle East FZC 81-88Aries Agro Care Private Limited 101-104Aries Agro Equipments Private Limited 117-120Aries Agro Produce Private Limited 130-133

Abstracts Aries Agro Limited 56Aries Agro Care Private Limited 105Aries Agro Equipments Private Limited 121Aries Agro Produce Private Limited 134

Report on Corporate Governance Aries Agro Limited 14-27Management Discussion and Analysis Report Aries Agro Limited 28-31Report on Corporate Social Responsibility Aries Agro Limited 32Statement pursuant to Section 212 of the Companies Act, 1956 57AGM Attendance Slip/Proxy Form Aries Agro Limited -

CONTENTSCONTENTSCONTENTSCONTENTSCONTENTS

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NONONONONOTICE OF TICE OF TICE OF TICE OF TICE OF ANNUANNUANNUANNUANNUAL GENERALAL GENERALAL GENERALAL GENERALAL GENERALMEETINGMEETINGMEETINGMEETINGMEETINGNotice is hereby given that the Fortieth Annual GeneralMeeting of the Members of ARIES AGRO LIMITED will beheld on Friday, the 17th September, 2010 at 10.00 a.m. atThe Acres Club, Hemu Kalani Marg, Chembur, Mumbai-400071, to transact the following business:-

ORDINARY BUSINESS

1. To receive, consider, approve and adopt the auditedBalance Sheet as at 31st March, 2010 and Profit andLoss Account for the year ended as on that datetogether with the Reports of the Board of Directorsand Auditors thereon.

2. To declare dividend for the Financial Year ended31.03.2010.

3. To appoint a Director in place of Dr. Rahul Mirchandaniwho retires by rotation and being eligible offers himselffor re-appointment.

4. To appoint a Director in place of Dr. D. S. Jadhav whoretires by rotation and being eligible offers himself forre-appointment.

5. To appoint M/s. Kirti D. Shah & Associates, CharteredAccountants, Mumbai,(Membership No. 32371) as theAuditors of the Company, to hold office from theconclusion of this Annual General Meeting until theconclusion of the next Annual General Meeting andto authorize the Board of Directors to fix theirremuneration upon the recommendation of the AuditCommittee.

SPECIAL BUSINESS

6. Appointment of Mr. Chakradhar Bharat Chhaya as aDirector of the Company

To consider and if thought fit to pass, with or withoutmodification(s), the following resolution as an OrdinaryResolution:-

“RESOLVED THAT Mr. Chakradhar Bharat Chhaya, who wasappointed by the Board of Directors as an Additional Directorwith effect from 29th October, 2009 under Section 260 of theCompanies Act, 1956 and Article 146 of the Articles ofAssociation of the Company and who holds Office upto thedate of this Annual General Meeting but who is eligible forappointment and in respect of whom the Company hasreceived a notice in writing from a Member under theprovisions of Section 257 of the Companies Act, 1956proposing his candidature for the office of a Director be andis hereby appointed as a Director of the Company whose

office shall be liable to retirement by rotation.”

7. Amendment in the Memorandum of Association of theCompany by adding a new clause for Borrowings.

To consider and if thought fit to pass, with or withoutmodification(s), the following resolution as a SpecialResolution:

“RESOLVED THAT following new Clause # 61be added afterexisting Clause # 60 of Other Objects Clause (C) of MainClause III of the Memorandum of Association.

Clause: 61: Subject to section 58A and section 292 of theCompanies Act,1956, to receive, borrow or raise money inany form and on such terms and conditions as the Companymay consider expedient and secure and discharge any debtor obligation binding on the Company in such manner asmay be thought fit, and in particular by mortgages of theundertaking and all or any of the immovable and movableproperty (present or future) and the uncalled capital of theCompany, or by the creation and issue, on such terms asmay be thought expedient, of shares, bonds, stock,debentures or debenture-stock, perpetual, convertible orotherwise, or other securities of any description.”

“RESOLVED FURTHER THAT the Board of Directors be andis hereby authorized to do all such act, deeds, matters andthings as may be considered necessary, desirable orexpedient including accepting any modification as suggestedby the Office of the Registrar of Companies, Maharashtra,Mumbai to the above said Object Clause, for giving effect tothis resolution.”

By Order of the Board

Place: Mumbai Qaiser P. Ansari

Date: 21st July, 2010 Company Secretary

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE ATTHE MEETING IS ENTITLED TO APPOINT A PROXYTO ATTEND AND VOTE ON A POLL INSTEAD OFHIMSELF AND THE PROXY NEED NOT BE AMEMBER OF THE COMPANY.

2. THE PROXY IN ORDER TO BE EFFECTIVE SHOULDBE LODGED WITH THE COMPANY AT LEAST 48HOURS BEFORE THE COMMENCEMENT OF THEMEETING. A PROXY SO APPOINTED SHALL NOTHAVE ANY RIGHT TO SPEAK AT THE MEETING.BLANK PROXY FORM IS ENCLOSED.

3. Corporate Members intending to send their AuthorisedRepresentatives to attend the Meeting are requested

5

to send to the Company a Certified Copy of the BoardResolution authorizing their Representative to attendand Vote on their behalf at the Meeting.

4. Explanatory Statement pursuant to Section 173(2) ofthe Companies Act, 1956, in respect of SpecialBusiness is annexed hereto.

5. All the documents referred to in the Notice andExplanatory Statement are open for inspection at theRegistered Office of the Company between 10.00 a.m.and 12.00 noon on all days, except Saturdays,Sundays and holidays until the date of the AnnualGeneral Meeting or any adjournment thereof.

6. Members desirous of getting any information aboutthe accounts and operations of the Company arerequested to write their queries to the Company at leastseven days in advance of the meeting so that theinformation required can be made readily available atthe meeting.

7. Individual shareholders can now take the facility ofnomination. The nominee shall be the person in whomall rights of transfer and/or amount payable in respectof shares shall vest in the event of the death of theshareholder(s). A minor can be a nominee providedthe name of the guardian is given in the NominationForm. Members who are interested in availing thenomination facility are requested to write to theCompany.

8. The Register of Members and Share Transfer Booksof the Company will be closed from Saturday, the 11thSeptember, 2010 to Friday, the 17th September, 2010(both days inclusive) for determining the names ofmembers eligible for dividend on Equity Shares, ifdeclared at the Meeting as recommended by the Boardof Directors. On such declaration of dividend at theforthcoming Annual General Meeting, such dividendwill be paid on or after 25th September, 2010 to thosemembers whose names appear on the Register ofMembers on 17th September, 2010 after giving effectto valid transfers in respect of transfer requests lodgedwith the Company on or before the close of business

hours on 10th August, 2010. In respect of shares heldthrough the depositories, dividend will be paid on theaforesaid date to the beneficial owners of shareswhose names appear at the close of business hourson 10th September, 2010 as per details furnished bythe depositories for this purpose.

9. Members are requested to avail the facility ofremittance of dividend through the National ElectronicClearing Systems (NECS) The NECS facility isavailable at locations identified by the Reserve Bankof India from time to time. Members holding shares inphysical form and desirous of availing this facility arerequested to immediately write to the Company’sRegistrars and Transfer Agents with changes in theirbank account/account numbers, if any, along with aphotocopy of a blank cheque pertaining to theconcerned account.

10. Beneficial Owners holding shares in Electronic/ Dematform are requested to notify any change in theirAddress, Bank Account, Mandate, etc. to theirrespective Depository Participant. ECS Mandates hasto be sent to the concerned Depository Participantdirectly.

11. Members holding shares in physical form arerequested to notify any change in their Address, BankAccounts etc. to the Registrar and Transfer Agent ofthe Company.

12. Members/ Proxies should bring the attendance slip dulyfilled in for attending the meeting. The Identity/Signature of the Members holding shares in Electronic/Demat form is liable for verification with SpecimenSignatures as may be furnished by NSDL/CDSL to theCompany. Such Members are advised to bring therelevant Identity Card issued by the DepositoryParticipant to the Annual General Meeting.

13. Members are requested to bring their copy of theAnnual Report to the Annual General Meeting.

14. Details of the Directors seeking appointment/re-appointment at the forthcoming Annual GeneralMeeting are given below:

6


Particulars required

Name of the Director

Date of Birth

Date of Appointment

Expertise in specific functional areas

Qualifications

Chairman/Member of the Committees of the Board ofDirectors of the Company.

Directorship in other Companies

Membership of Audit Committee of other Public LimitedCompanies

Membership of any other Committee of other Public LimitedCompanies.

Information

Dr. Rahul Mirchandani

12th August, 1975

2nd February, 1994

As Executive Director, he oversees various functions of theCompany namely Marketing, Brand Promotion and NewProduct Development etc.

B.Com, CFA , MBA, Ph. D(Management Studies) fromNMIMS.

Member of the Audit Committee and Shareholders’ /Investors’ Grievance Committee.

Sreeni Agro Chemicals Pvt. Ltd.Aries East-West Nutrients Pvt. Ltd.Blossoms International Ltd.Aries Marketing Ltd.Aries Agro Care Pvt. Ltd.Aries Agro Equipments Pvt. Ltd.Aries Agro Produce Private LimitedGolden Harvest Middle East FZC

NIL

NIL


Date of Birth

Date of Appointment


Qualifications





Dr. D. S. Jadhav

1st October, 1927

3rd March, 1995

Independent Director

B.Sc.(Vet) Hons, M.S., Ph.D.

Member of Audit CommitteeChairman of Remuneration Committee

NIL

NIL

NIL

7

Particulars required


Date of Birth

Date of Appointment


Qualifications





Information

Mr. Chakradhar Bharat Chhaya

9th November, 1943

29th October, 2009

Independent Director

B.Com., ICWA, CAIIB.

Member of Remuneration Committee.Member of the Treasury Committee.

1. Credila Financial Services Private Limited2. Texmo Pipes & Products Limited3. Calyx Chemicals & Pharmaceuticals Limited4. Yalamanchili Software Exports Limited

1. Texmo Pipes & Products Limited –Member of AuditCommittee2.Calyx Chemicals & Pharmaceuticals Limited-ChairmanAudit Committee3.Yalamanchili Software Exports Limited- Chairman AuditCommittee

1. Texmo Pipes & Products Limited – Member ofRemuneration and Compensation Committee and theChairman of Shareholders’/ Investors’ GrievanceCommittee2.Calyx Chemicals & Pharmaceuticals Limited-Member ofRemuneration Committee

15. The Registrar and Share Transfer Agent of the Company (RTA).

AARTHI CONSULTANTS PRIVATE LIMITED1-2-285, Domalguda,Hyderabad – 500 029,Andhra Pradesh, IndiaTel : +91-40-27634445 / 27642217,Fax : +91-40-27632184

E-mail : [email protected] : www.aarthiconsultants.com

8


EXPLANEXPLANEXPLANEXPLANEXPLANAAAAATTTTTORORORORORY STY STY STY STY STAAAAATEMENT PURSUTEMENT PURSUTEMENT PURSUTEMENT PURSUTEMENT PURSUANT ANT ANT ANT ANT TTTTTO SECTION 173 (2) OF O SECTION 173 (2) OF O SECTION 173 (2) OF O SECTION 173 (2) OF O SECTION 173 (2) OF THETHETHETHETHECOMPCOMPCOMPCOMPCOMPANIES ANIES ANIES ANIES ANIES AAAAACTCTCTCTCT,,,,, 1956. 1956. 1956. 1956. 1956.Item No. 6At the meeting of the Board of Directors held on 29th October,2009, Mr. Chakradhar Bharat Chhaya was appointed as anAdditional Director with effect from 29th October, 2009, tohold office till the date of the next Annual General Meeting ofthe Company. Mr. Chakradhar Bharat Chhaya was appointedas an Independent Director. The Company has received anotice in writing from a Member under the provisions ofSection 257 of the Companies Act, 1956, together with therequisite deposit, proposing his candidature for the office ofa Director

Brief profile of Mr. Chakradhar Bharat Chhaya in terms ofClause 49 of the Listing Agreement is given in the annexureto the Notice.

Mr. Chakradhar Bharat Chhaya is a B.Com from Universityof Mumbai. He is a Fellow of Institute of Cost and WorksAccountants of India. He is also a CAIIB (Certified Associateof Indian Institute of Bankers). He has more than 45 years ofexperience in the field of banking and finance. He began hiscareer in the year 1964 with Bank of Baroda. He worked atvarious positions before retiring as Managing Director ofBOBCARDS Limited. He is a Director in an NBFC viz CredilaFinancial Services Private Limited and Independent Directorof Texmo Pipes & Products Limited. He is also AdditionalDirector in Calyx Chemicals & Pharmaceuticals Limited andYallamanchili Software Exports Limited.

Mr. Chakradhar Bharat Chhaya does not hold any Shares ofthe Company.

The Board of Directors are confident that he will be of greatvalue to the Company and hence recommend the resolutionfor your approval as set out under item No. 6 of the Notice.

None of the Directors except Mr. Chakradhar B. Chhaya isconcerned or interested in the said resolution.

Item No. 7The Company has been borrowing money from time to timefrom Banks or otherwise for the Working Capital and for ongoing expansion or modernization programmes. The Banksat some instances have raised a query that the Memorandumof Association of the Company does not contain explicitly aborrowing clause in its Objects. Therefore, in order to meetwith the requirements of the Bankers it is proposed to amendthe Other Objects Clause of Memorandum of Association ofthe Company by adding a new Clause empowering the Boardof Directors for borrowing.

Section 17 of the Companies Act, 1956 provides that anamendment in the Objects Clause of Memorandum ofAssociation is required to be approved by passing a SpecialResolution.

Your Directors therefore, recommend passing of the SpecialResolution as set out under Item No. 7 of the Notice of themeeting.

None of the Directors of the Company is concerned orinterested in passing of the resolution.

A copy of the Memorandum of Association of the Company,with the proposed amendment, will be available for inspectionat the Registered Office of the Company on all working daysof the Company between 10.00 a.m. and 12.00 noon, exceptSaturdays, Sundays and other Public Holidays.


Place: Mumbai Qaiser P. AnsariDate: 21st July, 2010 Company Secretary

9

DIRECTORS’ REPORTDIRECTORS’ REPORTDIRECTORS’ REPORTDIRECTORS’ REPORTDIRECTORS’ REPORTTo

The Members,

Aries Agro Limited

Your Directors have pleasure in presenting their 40th AnnualReport on the operations of the Company together with theAudited Statements of Accounts for the Financial Year ended31st March, 2010.

FINANCIAL RESULTS

(Rs. In Lakhs)

PARTICULARS AS AT 31.03.2010 AS AT 31.03.2009Turnover 13,974.61 11,044.42

Profit Before Tax Interest 2,921.57 1,182.07& Depreciation

Less: Interest 867.62 581.31

Depreciation 159.83 1,027.45 97.03 678.34

Profit Before Tax 1,894.12 503.73

Provision for Taxation 535.00 113.00

Deferred Tax 103.09 638.09 79.96 192.96

Profit After Tax 1,256.03 310.77

Balance Brought Forward 2,556.10 2,428.14

Prior Period Expense 132.12 –

Exceptional Items 9.82 141.94 182.81 182.81

Amount available for 3,670.19 2,556.10appropriation

General Reserve 150.00 –

Proposed (Final) Dividend 195.06 –

Tax on Proposed Dividend 32.40 –

Surplus Carried Forward 3,292.73 2,556.10to Balance Sheet

OPERATIONS

During the year under review, the earnings before Interest,Depreciation and Tax was Rs. 2,921.57 Lakhs compared toRs 1,182.07 Lakhs in the previous year. As at March’2010,the Gross Fixed Asset is Rs. 4,060.74 Lakhs compared toRs. 3,576.55 Lakhs in the previous year. The Turn Over forthe year was Rs. 13,974.61 Lakhs as against Rs. 11,044.42Lakhs in the previous year reflecting a growth of 27 %. Profitafter tax for the year was Rs. 1,256.03 compared to Rs.310.77 Lakhs in the previous year.

The Company is a major manufacturer and supplier ofChelated micronutrients, value added secondary nutrientfertilizers and also water soluble NPK fertilizers. In addition,we also have a growing range of farm sprayers and plantprotection chemicals, including pesticides, insecticides,fungicides and herbicides in our product portfolio. In total,Aries has 76 brands. For detailed discussion please refer tothe Management Discussion Analysis forming part of thisreport.

DIVIDEND

After considering the performance of your Company andneed for conservation of resources, your Directors arepleased to recommend a dividend of 15 % being Rs. 1.50/-per Equity Share of Rs. 10/- each subject to your approvalat the ensuing Annual General Meeting. The dividend, ifapproved, will result in an outflow of Rs. 2,27,46,299/-lakhs including dividend tax.

FUTURE PROSPECTS

The Company is ready to launch an additional 6 newproducts, in phases during 2010-11. This will include furtherspecialty plant nutrients, farm equipment and plant protectionproducts, adding on to our already extensive range of 76brands. We believe that adding throughput through ourdistribution network will increase our share of the farmer’swallet and provide a comprehensive range of nutritionsolutions to choose from. For detailed discussion pleaserefer to the Management Discussion Analysis forming partof this report.

The Unit namely M/s. Amarak Chemicals FZC, set up byM/s. Golden Harvest Middle East FZC, will commenceproduction of Sulphur Bentonite in Fujairah by end July 2010.We believe that about half of the total capacity of 60,000 MTwill be utilized in the first year itself, with sales taking placethrough Aries’s own distribution network in India and alsothrough new buyers in the Middle East and SAARC Region.

Our other overseas subsidiary, Golden Harvest Middle EastFZC, is now in its third year of manufacturing operations ofChelated micronutrients. It has added during the year 2009-10, an additional product to its portfolio, viz., 20% solubleBoron. Golden Harvest is already working at full capacityutilization and has significantly increased its sales to Aries inIndia, as well as to customers in Bangladesh, Nepal, theMiddle East and Africa. The acceptance of Golden HarvestChelates and Boron based products as cost effective andworld class gives us the confidence that the future of ourInternational foray with specialty nutrients is very brightand exciting.

10

40th Annual Report 2009-2010The Company has also appointed distributors andcommenced negotiations for increasing global business inkey markets. We firmly believe that, these export markets,as well as servicing of our institutional clients in India, willopen up new opportunities for the Company.

USE OF IPO PROCEEDSYour Company had come out with its maiden IPO in January2008 for the purposes as stated in the Prospectus dated26th December, 2007 and as amended by the members attheir Annual General Meeting held on 29th September, 2009.Accordingly the Company has utilized the IPO funds for thepurposes for which it was raised.

DEPOSITSThe Company has not accepted any deposits from the Publicwithin the meaning of Section 58A of the Companies Act,1956.

SUBSIDIARIESThe Company has four subsidiaries, Aries Agro Care PrivateLimited, Aries Agro Equipments Private Limited, Aries AgroProduce Private Limited and Golden Harvest Middle East,FZC.

The operations of Aries Agro Care Pvt. Ltd. commenced inthe Financial Year 2008-09 and during the Financial Year2009-10 the Company has ended with a total revenue ofRs. 80.05 Lakhs which has resulted in Rs. 4.67 Lakhs asprofit after tax.

The business operations of Aries Agro Equipments Pvt. Ltd.commenced in the year ended 31st March, 2010 inagricultural sprayers generating a Sale of Rs. 139.90 Lakhswith profit after tax of Rs. 13.06 Lakhs.

The above two Companies are Wholly Owned Subsidiariesof the Company.No business activity took place in other Subsidiary namelyAries Agro Produce Pvt. Ltd.

As regards the overseas subsidiary M/S. Golden HarvestMiddle East FZC with an installed capacity of 10,800 MTp.a., in their second full year of operation, has generated atotal sale of AED 2,00,66,528/- with a profit of AED35,12,532/-.

M/s. Amarak Chemicals FZC, is in the process of allottingshares to M/S. Golden Harvest Middle East FZC. Oncompletion of allotment M/s. Amarak Chemicals FZC willbecome a Subsidiary of M/S. Golden Harvest Middle EastFZC, consequently M/s. Amarak Chemicals FZC will becomea step down Subsidiary of Aries Agro Limited.

As required under Section 212 of The Companies Act, 1956,annexed hereto are the Audited Statement of accounts, the

Reports of the Board of Directors and Auditors’ Reports forthe year ended 31st March, 2010 of Aries Agro Care PrivateLimited, Aries Agro Equipments Private Limited, Aries AgroProduce Private Limited and Golden Harvest Middle EastFZC.

A Statement of Subsidiary Companies as prescribed underSection 212 of the Companies Act, 1956, is annexed and isforming part of the Annual Report.

Apart from the above statement a list of SubsidiaryCompanies is given in Note No. 10- A of the Notes toAccounts forming part of the Annual Report.All the above subsidiary Companies are non-material, non-listed Companies as defined under Clause 49 of the ListingAgreement with the Stock Exchanges.

INSURANCEAll properties and assets of your Company are adequatelyinsured covering all conceivable risks attributable to theIndustry.

DIRECTORSIn accordance with the Companies Act, 1956 and the Articlesof Association of the Company, Dr. Rahul Mirchandani andDr. D. S. Jadhav retire by rotation at the ensuing AnnualGeneral Meeting and being eligible, offer themselves for re-appointment. Accordingly their re-appointment forms partof the notice of ensuing Annual General Meeting.

Mr. Chakradhar Bharat Chhaya was appointed as anAdditional Director on the Board of Directors of the Companywith effect from 29th October, 2009 as an IndependentDirector. He ceases to be a Director on the date of the 40thAnnual General Meeting. Notice under Section 257 of theCompanies Act, 1956 has been received in respect of hisappointment as Director on the Board and accordingly hisappointment is proposed as a Director at the ensuing AnnualGeneral Meeting.DIRECTORS’ REPLY TO OBSERVATIONS / REMARKSMADE IN AUDITORS’ REPORT (Para III(d) of the Auditors’Report)The Auditors have in their Audit Report commented that theCompany has not provided for Leave Encashment as perAccounting Standard 15. The Leave Encashment pertainsonly to Managerial Staff and is accounted on cash basis. Ithas been decided that provisions for Leave Encashmentwill be made during this year .

APPOINTMENT OF AUDITORSM/s. Kirti D. Shah & Associates(Membership No. 32371),the Auditors of the Company retire at the ensuing AnnualGeneral Meeting and being eligible and holding Peer Review

11

PARTICULARS OF EMPLOYEES IN TERMS OF SECTION 217(2-A) OF THE COMPANIES ACT, 1956 DRAWINGREMUNERATION NOT LESS THAN RS. 24 LAKHS P.A./RS. TWO LAKHS P.M. DURING THE YEAR 2009-10

SR. DESGINATION REMUNERATION NATURE OF OTHER NATURE QUALIFICATION DATE OF AGE Last % ofNo. NAME RECEIVED EMPLOYMENT TERMS & OF DUTY & EXPERIENCE APPOINTMENT Employment Equity

CONDITIONS held Sharesheld as on31.03.2010

LISTINGThe Equity Shares of the Company are listed at Bombay StockExchange Limited(BSE) and National Stock Exchange ofIndia Limited(NSE).

The Company has made all the compliances of ListingAgreement including payment of Annual Listing Fees upto31st March, 2011 to both the Stock Exchanges.

CORPORATE GOVERNANCE

The Company has complied with the various requirementsunder the Corporate Governance reporting system. A detailedCompliance Report on Corporate Governance is annexed to

this report. The Auditors’ certificate on compliance with theconditions of Corporate Governance under clause 49 of theListing Agreement is also annexed to this report.

CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNING &OUTGO

Particulars in respect of Conservation of Energy, TechnologyAbsorption and Foreign Exchange Earnings and Outgo, asrequired to be disclosed under Section 217(1) (e) of theCompanies Act, 1956 read with the Companies {Disclosureof Particulars in the Report of the Board of Directors} Rules,1988 and forming a part of the Directors Report are as under:

1 DR. JIMMY MIRCHANDANI CHAIRMAN 70,17,663 CONTRACTUAL N.A. MANAGING B. Sc. (Vet); LLB 15.01.1976 54 N.A. 14.05AND THE

MANAGING AFFAIRSDIRECTOR OF THE

COMPANY

2 DR. RAHUL MIRCHANDANI EXECUTIVE 63,50,032 CONTRACTUAL N.A. MANAGING B. Com; CFA; 02.02.1994 34 N. A. 5.10DIRECTOR THE MBA; Ph.D

AFFAIRSOF THECOMPANY

3 MR. P. K. JAISWAL CHIEF 25,09,014 CONFIRMED N.A. MARKETING B. Sc. 25.01.1982 52 N.A. 0.02MARKETING EMPLOYEE HEAD FORCONTROLLER CENTRAL

ANDWESTERNREGION

Certificate issued by the Institute of Chartered Accountantsof India, offer themselves for re-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENTS

Pursuant to the requirements of Section 217 (2AA) of theCompanies Act, 1956 with respect to the Directors’responsibility statement, it is hereby confirmed that:

1. In preparation of the Annual Accounts, applicableAccounting Standards have been followed and thatthere are no material departures

2. The Directors have selected such Accounting Policiesand applied them consistently and made judgementsand estimates that are reasonable and prudent so asto give a true and fair view of the State of the Affairs ofthe Company at the end of the financial year and of

the profit of the Company for that period;

3. The Directors have taken proper and sufficient carefor the maintenance of adequate accounting recordsin accordance with the provisions of the CompaniesAct, 1956 for safeguarding the assets of the Companyand for preventing and detecting fraud and otherirregularities; and

4. Annual Accounts have been prepared on a ‘goingconcern’ basis.

PARTICULARS OF EMPLOYEES

Information in accordance with the provisions of Section217(2A) of the Companies Act, 1956 (“Act”) read with theCompanies (Particulars of Employees) Rules, 1975, asamended, are as under:

12

40th Annual Report 2009-2010I. Conservation of energy

The Company accords great importance toconservation of energy. The main focus of theCompany during the year was :

a. Energy Conservation measures taken:-

i. Close monitoring of consumption ofelectricity, LPG, Diesel and water.

ii. Optimum use of Energy by Switching offMachines, Lights, Fans, Air Conditionersand Exhaust Systems whenever notrequired.

iii. Creating awareness among Workmen toconserve energy.

b. Additional investments and proposals, if any,being implemented for reduction of consumptionof energy;

i. installation of energy efficient lights in theoffice and factory

ii. installation of LED lights.

c. Impact of measures of (a) and (b) above forreduction of energy consumption andconsequent impact on the cost of production ofgoods:

i. Due to measures taken as describedabove, the overall power and fuel oilconsumption at plants and office hasreduced and reduction in the cost ofproduction is achieved.

d. Total energy consumption and energyconsumption per unit of production

Form – A

Form for disclosure of Particulars withrespect to Conservation of Energy.

Current PreviousYear Year

2009-2010 2008-2009

(a) Purchased: -

(i) Unit (KWH) 7,33,592 9,41,514

(ii) Total Amount 50,42,998 56,35,214(Rs.)

(iii) Rate/Unit 6.87 5.99(Rs.)

(b) Own Generation: -(i) Coal Not Not

Applicable Applicable(ii) Furnace Oil - Kl 7,145 8,436(iii) Internal 23,864 28,176

Generation –Units

II. Form for disclosure of particulars with respect toTechnology Absorption, Research andDevelopment(A) Research and Development:

1. Specific Areas in which Research andDevelopment was carried out by theCompany.– There is a continuous focus on

University research on specialty plantnutrition which continues acrossIndia.

– Our team of extension officersconducts continuous fielddemonstrations and extension workincluding large scale soil sampling,which provides constant updates ondeficiency levels across all states inIndia.

– The Company’s R&D at Bombay isISO 9001 certified and works on newproduct development and continuousquality checks. The newmanufacturing unit at Hyderabad hasbeen equipped with a state of artlaboratory to keep pace with theCompany’s expansion in that region.

– Our ISO 9001 certification has nowbeen upgraded from the ISO9001:1998 standard to the latest ISO9001:2008 standards.

2. Benefits derived as a result o the aboveefforts.

– Improvement in productivity/qualityand reduction in cost of productionof Company’s Plants and atCustomer’s end.

– Cost reduction, import substitution,safer environment and strategicresource management.

– Meeting the statutory requirements.

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3. Future Plan of Action :

– Evaluation of potential CustomizedCrop Specific combinations forenhancement of nutrients.

– Design of secondary packagingautomation for chelamin and otherbrands.

4. Expenditure on R & D

Description For the For theyear year

ended ended31st March, 31st March,

2010 2009(Rupees) (Rupees)

(I) Capital 2,84,540 11,41,736

(II) Recurring 24,44,030 19,09,921

(III) TOTAL 27,28,570 30,51,657

(IV) Total R & D expenditure as a % of a. Gross 0.20 0.28 Turnover

b. Net 0.20 0.28 Turnover

B1. Technology Absorption, Adaptation andInnovationThe Management has focused on productivityand Total Quality Management [TQM] in orderto optimize manufacturing costs.

B2. BenefitsThis has helped in achieving optimummanufacturing costs, improved quality ofproducts and consequently, enhanced customersatisfaction. The Company uses indigenoustechnology.

B3. The Company has not imported any technologyduring the year under review.

C. Foreign Exchange Earnings and Outgo1. Activities relating to exports, initiatives

taken to increase exports, developmentof new export markets for products andservices and export plans:

The Company has also appointeddistributors and commenced negotiations

for increasing global business in keymarkets.. We firmly believe that, theseexport markets, as well as servicing ofour institutional clients in India, will openup new opportunities for the Company.

2. Total Foreign Exchange used andearned:

Used : Rs. 30,18,13,507/-

Earned : Rs. 4,14,95,891/-SPECIAL BUSINESSAs regards the items of the Notice of the AGM relating toSpecial Business, the resolutions incorporated in the Noticeand the Explanatory Statement relating thereto, fully indicatethe reasons for seeking the approvals of members to thoseproposals. Your attention is drawn to these items andExplanatory Statement annexed to the Notice.

GENERALNotes forming part of the Accounts are self-explanatory. Asrequired under the VAT Acts of various States, Company hasappointed a VAT Auditor to conduct the VAT Audit. TheCompany’s Building, Machineries, Stores and Stocks in Tradeetc. are fully covered against all insurance risks.

GROUPThe List of persons constituting “Group” (within the meaningas defined in the Monopolies and Restrictive Trade PracticesAct, 1969) for the purpose of availing exemption fromapplicability of the provisions of Regulations 10 to 12 of theSecurities Exchange Board of India (Substantial Acquisitionof shares and Takeovers) Regulations 1997 as provided inClause 3(1)(i) of the said Regulations is given in the Reporton the Corporate Governance.

ACKNOWLEDGEMENTWe would like to acknowledge with gratitude, the supportand co-operation extended by Shareholders, Vendors, Mediaand Banks and look forward to their continued support. Weappreciate continued co-operation received from variousregulatory authorities including Department of Agriculture,Department of Corporate Affairs, Registrar of Companies,Reserve Bank of India, Securities and Exchange Board ofIndia, Stock Exchanges and Depositories. We also recognizeand appreciate the sincere hard work, loyalty and efforts ofthe employees and look forward to their continued support.

For and on behalf of the Board of Directors

Dr. Jimmy MirchandaniPlace: Mumbai Chairman &Date: 21st July, 2010 Managing Director

14


REPORREPORREPORREPORREPORT ON CORPORAT ON CORPORAT ON CORPORAT ON CORPORAT ON CORPORATE GOTE GOTE GOTE GOTE GOVERNVERNVERNVERNVERNANCEANCEANCEANCEANCECORPORATE GOVERNANCE PHILOSOPHY

The Company is fully committed to the principles of good Corporate Governance. In keeping with this commitment yourCompany has been observing the highest level of ethics in all its dealings. It ensures efficient conduct of affairs of theCompany to achieve its goal of maximizing value for all its stakeholders. In compliance with the disclosure requirements ofClause 49 of the Listing Agreement executed with the Stock Exchanges, the details are set out below:-

1. BOARD OF DIRECTORS(A) Board Composition

The Board of Directors of the Company (‘the Board’) consists of 6 Directors, headed by an Executive Chairmanand out of which Four(4) are Non Executive Directors. Three(3) are Independent Directors. The IndependentDirectors are eminent professionals, with experience in Nutrition, Management and Strategy, Banking etc.Composition of the Board and category of Directors are as follows:

Category Name of the DirectorsPromoter- Executive Directors Dr. Jimmy Mirchandani

Chairman & Managing DirectorDr. Rahul MirchandaniExecutive Director

Promoter- Non-Executive Directors Mr. Akshay Mirchandani

Independent- Non-Executive Directors Dr. D. S. Jadhav

Prof. R.S.S. Mani

Mr. Chakradhar Bharat Chhaya(Additional Director) *w.e.f. 29.10.2009

Dr. S. R. Ganesh** upto 31.07.2009

• *appointed w.e.f. 29th October, 2009.

• ** Resigned w.e.f. 31st July, 2009.

(B) Attendance and Other DirectorshipsAttendance of Directors at Board Meetings, last Annual General Meeting and number of other Directorships andChairmanships/Memberships of Committees of each Director in various Companies as on 31st March, 2010 isas follows:-

15

Name of the Director & Attendance of Meetings Directorship No. of Inter SeDesignation and category during 2009-10 in other Membership(s)/ Relationship

Board Last AGM Public Chairmanship(s)Meetings held on 29th Companies of Board

September, 2009 incorporated Committeesin India in other

Companies

Dr. Jimmy Mirchandani 4 (4) Yes 1 NIL N.A.Chairman & ManagingDirector (Promoter)

Dr. Rahul Mirchandani 3 (4) Yes 2 NIL Brother ofExecutive Director (Promoter) CMD

Dr. D. S. Jadhav 4(4) Yes NIL NIL N.A.Director, Non Executive(Independent)

Prof. R. S. S. Mani 4(4) Yes NIL NIL N.A.Director, Non Executive(Independent)

Mr. Akshay Mirchandani 2(4) Yes NIL NIL Son of CMDDirector, Non-Executive(Promoter)

Mr. Chakradhar Bharat Chhaya 2(4) N.A. 3 6 N.A.Additional Director, (including 3Non Executive (Independent) as Chairman)w.e.f. 29.10.2009

Dr. S. R. Ganesh 1(2) NA 1 1 N.A.Director, Non Executive(Independent) upto 31.07.2009

None of the Directors on the Board holds the office of Director in more than 15 Companies or Membership ofCommittees of the Board in more than 10 Committees or Chairmanship of more than 5 Committees across allCompanies.

(C) Board Meetings

The Agenda are circulated to the Directors well in advance of the Board Meetings and additional items, if any,are tabled in the course of the Board Meetings. During the year information as mentioned in Annexure 1A toClause 49 of the Listing Agreement has been placed before the Board for its consideration.

Four Board Meetings were held during the year, on 26.06.2009, 31.07.2009, 29.10.2009 and 28.01.2010.

(D) Code of Conduct

The Company has adopted a Code of Conduct for the members of the Board and the Senior Executives incompliance with the provision of Clause 49 of the Listing Agreement. All the members of the Board and theManagement Committee have affirmed compliance to the Code of Conduct as on 31-03-2010, and a declarationto that effect signed by the Chairman & Managing Director is attached and forms a part of this Report.

16

40th Annual Report 2009-2010BOARD COMMITTEES2. AUDIT COMMITTEE

i) Brief description of terms of referencea. Oversight of the Company’s financial reporting process and the disclosure of its financial information to

ensure that the financial statement is correct, sufficient and credible.

b. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removalof the Statutory Auditor and the fixation of Audit Fee.

c. Approval of payment of Statutory Auditors for any other services rendered by the Statutory Auditors.

d. Reviewing with the Management, the Annual Financial Statements before submission to the Board forapproval, with particular reference to:

i) Matters required to be included in the Directors’ Responsibility Statement to be included in theBoard’s Report in terms of Clause (2AA) of section 217 of the Companies Act, 1956;

ii) Any Changes in Accounting Policies and Practices; reasons for the same;

iii) Major accounting entries involving estimates based on the exercise of judgment by Management;

iv) Significant adjustments made in the Financial Statements arising out of Audit findings;v) Compliance with Accounting Standards;

vi) Compliance with Stock Exchanges and legal requirements concerning Financial Statements;

vii) Any Related Party transactions i.e transactions of the Company of material nature, with Promotersor the Management, their Subsidiaries or Relatives etc. that may have potential conflict with theinterests of the Company at large.

e. Reviewing with the Management, Statutory and Internal Auditors the adequacy of the Internal Control Systems

f. Reviewing the adequacy of Internal Audit function, including the structure of the Internal Audit department,staffing and seniority of the official heading the department, reporting structure coverage and frequencyof Internal Audit.

g. Discussion with Internal Auditors any significant findings and follow up thereon.h. Reviewing the findings of any internal investigations by the Internal Auditors into matters where there is

suspected fraud or irregularity or a failure of Internal Control Systems of a material nature and reportingthe matter to the Board.

i. Discussion with Statutory Auditors before the Audit Commences, about the nature and scope of Audit aswell as post-audit discussion to ascertain any area of concern.

j. Reviewing the Company’s Financial and Risk Management Policies;

k. To look into the reasons for substantial defaults in the payment to the Depositors, Debenture Holders,Shareholders (in case of non payment of declared dividends) and creditors.

l. To approve appointment of Chief Financial Officer before finalization of the same by the Management

The terms of reference of the Audit Committee are in accordance with Clause 49 of the Listing Agreement andSection 292A of the Companies Act, 1956. The Committee acts as a link between the Management, Auditorsand Board of Directors of the Company and has full access to financial information.Recommendations of the Audit Committee, if any, are considered and implemented by the Board from time to time.

(ii) Composition, Name of Members and ChairpersonThe Audit Committee comprises of the following Directors:

Prof. R. S. S. Mani : Chairman (Independent Director)

17

Dr. D. S. Jadhav : Member (Independent Director)

Dr. Rahul Mirchandani : Member (Non-Independent Director)

The Chairman of the Audit Committee remains present at the Annual General Meeting. The previous AnnualGeneral Meeting of the Company was held on 29th September, 2009 and was attended by Prof. R. S. S. Mani,Chairman of the Audit Committee.

(iii) Meetings and Attendance during the yearThe Audit Committee met 5 times during the year on 14.05.2009, 26.06.2009, 31.07.2009, 29.10.2009 and28.01.2010.

The attendance of each member of the committee is given below:

Name of the Director No. of meetings attendedProf R. S. S. Mani 5

Dr. D. S. Jadhav 5

Dr. Rahul Mirchandani 4

The Statutory Auditors and the Internal Auditors and Chief Financial Officer are permanent invitees to the meetingsof the Committee. The Company Secretary is the Secretary of the Committee.

3. REMUNERATION COMMITTEE(i) Brief description of Terms of Reference

To determine the Company’s policy on specific remuneration packages for Executive Directors including pensionrights and any compensation payment.

(ii) & (iii) Composition, Name of members, Chairperson & Attendance during the yearRemuneration Committee consists of Dr. D. S. Jadhav, Prof. R. S. S. Mani and Mr. Chakradhar BharatChhaya(w.e.f. 29.10.2009)(Dr. S. R. Ganesh upto 31.07.2009) all Independent Directors, as members. Dr. D. S.Jadhav is the Chairman of the Committee. Committee met once on 31.07.2009.

(iv) Remuneration PolicyThe remuneration policy for Working Directors is in line with the other peer Companies and reviewed periodically.The payment of remuneration is duly approved by the Board of Directors upon the recommendation of theRemuneration Committee and the Shareholders.

(v) Details of Remuneration paid to the Directors for the year ended 31st March 2010.i) Managing Director and Executive Director.

The Agreements with the Chairman & Managing Director and Executive Director are for a period of threeYears commencing from 01.10.2009.

The total remuneration paid to the Managing Director and Executive Director during the year 2009-10 was as under:

(Amount in Rupees)

Name Salary Commission Contribution Totalto Provident

Fund/ Gratuity

Dr. Jimmy Mirchandani 39,50,917 27,50,000 3,16,746 70,17,663Chairman & Managing Director.

Dr. Rahul Mirchandani 33,08,978 27,50,000 2,91,054 63,50,032Executive Director

18

40th Annual Report 2009-2010Notes:

a) The Agreements with the Managing Director, and Executive Director are for a period of three yearsupto 30th September, 2012. Either party to the Agreement is entitled to terminate by giving theother party a notice of 3 months.

b) The Managing Director and Executive Director are entitled to compensation for loss of office inaccordance with and subject to restrictions laid down under section 318 of the Companies Act1956.

c) Presently, the Company does not have a scheme for grant of Stock Options to its Working Directors

d) The Managing Director and Executive Director are entitled to commission within the overall limitprescribed under sections 198 & 309 of the Companies Act, 1956.

ii) The Non Executive Directors are not entitled to any remuneration except payment of sitting fees forattending the meetings of Board of Directors and Committees thereof. During the year 2009-10, theCompany has paid total Sitting Fee of Rs. 2,02,500/- to Non Executive Directors as under:Dr. D. S. Jadhav Rs. 70,000.00Prof. R. S. S. Mani Rs. 72,500.00Mr. Akshay Mirchandani Rs. 20,000.00Mr. C. B. Chhaya (w.e.f. 29.10.2009) Rs. 30,000.00Dr. S. R. Ganesh(upto 31.07.2009) Rs. 10,000.00

4. SHAREHOLDERS / INVESTORS GRIEVANCES COMMITTEE(i) Composition of the Committee

The Shareholders/ Investors Grievance Committee has been constituted to specifically look into redressing theShareholders and Investors’ Complaints.The Committee consists of the following members:Prof. R. S. S. Mani : ChairmanDr. Jimmy Mirchandani : MemberDr. Rahul Mirchandani : Member

(ii) Name & Designation of Compliance Officer:Mr. Qaiser Parvez Ansari, Company Secretary or in his absence Mr. S. Ramamurthy, Chief Financial Officer isdesignated as Compliance Officer of the Company.

(iii) to (v) A statement of various Complaints received and cleared by the Company during the year ended on31st March, 2010 is given below:

Nature of Complaint No. of Complaints Redressed Pending

1. Non- receipt of Refund Orders 8 8 Nil

TOTAL 8 8 NilAs per revised Clause 47(F) of the Listing Agreement the E-mail ID of the Investor Grievance Department of theCompany is [email protected] Web Site address of the Company is www.ariesagro.com.

5. TREASURY COMMITTEEComposition of the CommitteeThe Treasury Committee was constituted by the Board of Directors of the Company in their meeting held on 28thJanuary, 2010 to look into financial needs of the Company from time to time and negotiate the Terms and Conditions

19

The Committee consists of the following members:

Dr. Jimmy Mirchandani : Chairman

Dr. Rahul Mirchandani : Member

Mr. C. B. Chhaya : Member

6. General Body Meetings(i) and (ii) The date, time and venue of the last 3 General Body Meetings of the Company is given below:

Financial Year Date Time Venue Details of Specialended Resolutions

31st March, 2007 07-09-2007 4.00 p.m. Aries House, NonePlot No.24,Deonar, Govandi (E),Mumbai -400043

31st March, 2008 28-08-2008 10.00 a.m. The Acres Club, Keeping of the Register ofHemu Kalani Marg, Members, Index of Members andChembur, Copies of all Annual ReturnsMumbai-400 071 prepared under Section 159

together with Copies of theCertificates and Documentsrequired to be annexed theretounder Section 161 of theCompanies Act, 1956 or any oneor more of them(the documents)at a place other than theRegistered Office of theCompany.

31st March, 2009 29-09-2009 10.00 a.m. The Acres Club, Re-appointment and fixation ofHemu Kalani Marg, remuneration of Dr. JimmyChembur, Mirchandani, Chairman &Mumbai-400 071 Managing Director and Dr. Rahul

Mirchandani, Executive Directorfor a period of 3 years w.e.f.01.10.2009.

Amendment in the terms of thedeployment of the IPO Fundsreferred to in the Prospectusdated 26th December, 2007.

(iii) to (iv) No Postal ballot was conducted during the year under review. No Extra Ordinary General Meetingwas held.

7. DISCLOSURES

(i) During the year under review, besides the transactions reported elsewhere in the Annual Report, there were noother Related Party Transactions with the Promoters, Directors and Management that had a potential conflictwith the interest of the Company at large.

with the Banks/Financial Institutions, avail the Credit Facilities and finalize and sign Agreements, Deeds, Documentsetc with the Banks/Financial Institutions.

20

40th Annual Report 2009-2010All the transactions with Related Parties are periodically placed before the Audit Committee. The Register ofContracts detailing transactions in which Directors are interested is placed before the Board at every Meetingfor its approval. Transactions with Related Parties, as per requirements of Accounting Standard 18 are disclosedin Schedule 19, Note No. 10 to the Accounts in the Annual Report and they are not in conflict with the interest ofthe Company at large.

(ii) There have been no instances of Non-Compliance on any matter with the Rules and Regulations prescribedby the Stock Exchanges, Securities and Exchange Board of India or any other Statutory Authority relating tothe Capital Markets during the last three years.

(iii) The Company has not adopted any Whistle Blower Policy. However, no personnel has been denied access tothe Senior Management.

(iv) The Company has complied with the mandatory requirements regarding the Board of Directors, Audit Committeesand other Board Committees and other disclosures as required under the provisions of the revised Clause 49 ofthe Listing Agreement. The status of compliance in respect of non-mandatory requirements of Clause 49 ofListing Agreement is as follows:

(a) Maintenance of the Chairman’s Office: The Company has an Executive Chairman and the office providedto him for performing his executives is also utilized by him for discharging his duties as Chairman. Noseparate office is maintained for the Non-Executive Chairman of the Audit Committee but Secretarial andother assistance is provided to him, whenever needed, in performance of his duties.

(b) Tenure of Independent Directors: No specific tenure has been specified for the Independent Directors.

(c) Remuneration Committee: The Company has set up a Remuneration Committee consisting of threeNon Executive Independent Directors.

(d) Shareholders’ rights: Un-Audited Quarterly Financial Results are posted on the website of the Company.

(e) Audit Qualification: The Auditors remarks if any are explained in the Directors Report and necessaryactions are also taken by the Company when required. The Company shall endeavor to have unqualifiedFinancial Statements.

(f) Training of Board of Directors: The Directors of the Company are persons from Business and Professionwith experience in Corporate Sector. They are being kept posted with various Statutory and Regulatorychanges which are applicable to the Company.

(g) Mechanism for evaluating Non-Executive Board Members: Non Executive Members of the Board arehighly qualified and there is no need for evaluation.

(h) Whistle Blower Policy: The Company has so far not framed a formal whistle blower policy. However, theemployees of the Company have free access to the Board of Directors, Audit Committee and SeniorManagement personnel to report their concerns about unethical behaviour, fraud or violation of statutoryrequirements, with assurance from the Management to protect the employees from victimization in casethey report any such unethical or fraudulent behaviour.

(i) Board disclosures-Risk Management: The Board is kept informed about the Risk Management beingfollowed by the Company from time to time. All the risks such as fire, marine, burglary, earthquake etc.have been adequately insured.

(j) CMD/CFO Certification:Chairman & Managing Director/Chief Executive Officer and Chief Financial Officer have issued necessarycertificate pursuant to the provisions of clause 49 of the Listing Agreement and the same is annexed andforms part of the Annual Report.

(k) Declaration regarding Code of Conduct:Declaration by the Chairman and Managing Director confirming compliance with the Code of Conduct asadopted by the Company is annexed and forms part of the Annual Report.

21

8. SHAREHOLDING OF THE NON-EXECUTIVE DIRECTORSThe Company’s Articles of Association do not require its Directors to hold any Qualification Shares. The details of theshareholding of its Non Executive Directors are given below:

Name of the Non Executive Directors Number of Equity Share (Pre-Issue)

Dr. D. S. Jadhav 1,050

Prof. R. S. S. Mani NIL

Mr. Akshay Mirchandani 3,61,875

Mr. C. B. Chhaya (w.e.f. 29.10.2009) NIL

Dr. S. R. Ganesh (upto 31.07.2009) NIL9. MEANS OF COMMUNICATIONWebsite : The Company’s website www.ariesagro.com where relevant information is available. Full Annual Report

is also available on the website in a user-friendly and downloadable form.Annual Report : Annual Report containing inter alia Directors’ Report, Auditor’s Report, Audited Annual Accounts and

other important information is circulated to Members and others entitled thereto. The Management’sDiscussion and Analysis (MD&A) Report forms part of the Annual Report.

10. MANAGEMENT DISCUSSION AND ANALYSIS REPORTIn line with the requirements of Clause 49 of the Listing Agreement, the Management Discussion and Analysis Reportis also provided elsewhere in this Annual Report.

11. A. Disclosure on materially significant Related Party transactions i.e. transactions of the Company of materialnature, with its Promoters, the Directors or the Management, their relatives, or Subsidiaries, etc. thatmay have potential conflict with the interests of the Company at largeAttention of Members is drawn to the disclosures of transactions with the Related Parties set out in NoteNo. 10-B in the Notes to Accounts forming part of the Annual Report.All Related Party transactions are negotiated on arms length basis and are only intended to further the interestsof the Company.None of the transactions with any of the Related Parties were in conflict with the interest of the Company.

B. Details of non-compliance by the Company, penalties, strictures imposed on the Company by StockExchanges or SEBI, or any other Statutory Authority, on any matter related to Capital Markets.There has been no instance of Non-Compliance by the Company on any matter related to Capital Markets sinceit got listed on 11th January, 2008 and hence no penalties or strictures have been imposed on the Company bythe Stock Exchanges or SEBI or any other Statutory Authority.

12. General Shareholders Information(i) Annual General Meeting

The 40th Annual General Meeting of the Shareholders will be held on Friday, 17th September, 2010 at 10.00 a.m.Venue: The Acres Club, Hemu Kalani Marg, Chembur, Mumbai – 400 071.

(ii) Financial Calendar:-For the year ending 31st March, 2011 the Financial Results will be announced on:First Quarter : On or before 14th August, 2010Half year : On or before 14th November, 2010Third Quarter : On or before 14th February, 2011Yearly : On or before 30th May, 2011

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40th Annual Report 2009-2010(iii) Date of Book Closure: - 11th September, 2010 to 17th September, 2010 (both days inclusive)

(iv) Dividend Payment Date: On or after 25th September, 2010.

(v) Listing: The Equity Shares of the Company are listed on Bombay Stock Exchange Ltd and National StockExchange of India Ltd.

(vi) ISIN NO. : INE298I01015

Scrip Code : BSE - 532935

NSE - ARIES

(vii) Listing Fee: The Listing Fee for the financial year 2010-2011 has been paid to the above Stock Exchanges.

(viii) Market Price Data: high, low during each month in the last Financial Year.

Monthly Share Price Data of the Company’s shares on BSE for the year ended 31st March, 2010

Month Highest Lowest

Rate (Rs.) Date Rate (Rs.) Date

April, 2009 44.35 13.04.2009 26.15 08.04.2009

May, 2009 59.00 27.05.2009 33.50 15.05.2009

June, 2009 62.90 05.06.2009 42.00 23.06.2009

July, 2009 58.50 01.07.2009 39.05 13.07.2009

August, 2009 81.45 27.08.2009 44.00 12.08.2009

September, 2009 74.70 01.09.2009 52.90 16.09.2009

October, 2009 63.95 07.10.2009 48.00 30.10.2009

November, 2009 65.20 30.11.2009 47.60 06.11.2009

December, 2009 83.30 31.12.2009 63.00 04.12.2009

January, 2010 103.15 21.01.2010 78.20 04.01.2010

February, 2010 93.50 15.02.2010 79.65 05.02.2010

March, 2010 119.70 22.03.2010 86.15 04.03.2010

Monthly Share Price Data of the Company’s shares on NSE for the year ended 31st March, 2010



April, 2009 44.45 13.04.2009 25.00 06.04.2009

May, 2009 60.90 27.05.2009 33.60 15.05.2009

June, 2009 65.30 08.06.2009 43.80 19.06.2009

July, 2009 58.85 01.07.2009 38.30 13.07.2009

August, 2009 81.15 27.08.2009 42.50 10.08.2009

23



September, 2009 75.00 01.09.2009 53.00 22.09.2009&

25.09.2009

October, 2009 62.90 07.10.2009 48.25 30.10.2009

November, 2009 65.45 30.11.2009 47.00 04.11.2009

December, 2009 82.00 31.12.2009 62.55 21.12.2009

January, 2010 98.50 21.01.2010 75.10 04.01.2010

February, 2010 94.05 15.02.2010 79.20 05.02.2010

March, 2010 123.00 22.03.2010 87.50 03.03.2010&

04.03.2010

(ix) Performance in comparison to BSE & NSE Sensex

(x) Name and Address of the Registrar and Share Transfer Agents

AARTHI CONSULTANTS PVT LTDRegd. Office1-2-285 Domalguda,Hyderabad – 500029Tel: 040 27638111 / 27634445 / 27642217 / 66611921Fax: 040 27632184Email: [email protected]

(xi) Share Transfer SystemAarthi Consultants Private Limited processes transfer of shares held in Physical form and sends to the Company.If the relevant documents are in order and complete in all respects, the transfer of shares is effected andcertificates are dispatched to the transferees within 30 days from the date of receipt.

The requests for dematerialisation of shares are processed by the Registrar and Share Transfer Agents and ifall the documents are found to be in order, the same are approved by them within a period of 15 days.

BSE NSE

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40th Annual Report 2009-2010(xii) (1) Distribution of Share Holding as on 31st March 2010

Shareholding of Shareholders Share AmountNominal Value

From To Number No of Shares % of Total Rupees % of Total

1 5000 8694 869438 88.03 8694380 6.69

5001 10000 626 467149 6.34 4671490 3.59

10001 20000 242 364351 2.45 3643510 2.80

20001 30000 67 169737 0.68 1697370 1.31

30001 40000 39 141000 0.39 1410000 1.08

40001 50000 50 236795 0.51 2367950 1.82

50001 100000 69 528859 0.70 5288590 4.07

100001 And above 89 10227010 0.90 102270100 78.64

TOTAL 9876 13004339 100.00 130043390 100.00

(2) Distribution of shareholding according to categories of shareholders as on 31st March, 2010

Categories No. of Shares Amt. in Rs. % to Total

Promoters 6844926 68449260 52.64

Directors (Independent) 1050 10500 0.01

Financial Institutions/ Banks -- -- --

Mutual Funds / UTI 828821 8288210 6.37

NRIs / OCBs/FIIs 106296 1062960 0.82

Other Bodies Corporate 1427861 14278610 10.98

Public 3795385 37953850 29.18

Total 13004339 130043390 100.00

For the purpose of SEBI (Substantial Acquisition of Shares & Takeover) Regulation 1997, the following Companiesare to be considered as Group Companies belonging to Promoters Group.

Sr. No. Name of the Companies Shareholding as on 31.03.2010

1. Sreeni Agro Chemicals Pvt. Ltd. NIL

2. Aries Marketing Ltd. NIL

3. Blossoms International Ltd. NIL

4. Aries East-West Nutrients Pvt. Ltd. NIL

Subsidiary CompaniesA list of Subsidiary Companies is given in Note No. 10-A of the Notes to Accounts forming part of the Annual Report.

All the Subsidiary Companies are Board managed. As the majority share holder, the Company has nominated itsrepresentative on the Board of Subsidiary Companies to monitor performance of such Companies.

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(xiii) Details of Demat Shares as on 31st March, 2010

Name of Depository No. of Shareholders No. of Shares % of Capital

NSDL 6440 11152209 85.76

CDSL 3090 1416164 10.89

Sub-Total 9530 12568373 96.65

Physical Mode 346 435966 3.35

Grand Total 9876 13004339 100.00

(xiv) The Company has not issued any GDR’s/ ADR’s, Warrants or any other convertible instruments.

(xv) Plant Location: -Location Address

Mumbai, Maharashtra • Aries House, Plot No. 24, Deonar, Govandi(E), Mumbai - 400 043, Maharashtra

Kolkata • ALW Estate Private Limited, Holding No. F-189, Ward 28, South Station Road,Salpata Bagan, Agarpara, Kolkata, 700 109, West Bengal

Hyderabad • 244-246, 250-252, IDA Phase-II, Pashamylaram, Medak Dist. PatancheruMandal, Hyderabad, Andhra Pradesh

Bangalore • 8-B, Attibele Industrial Area, Hosur Main Road, Attibele, Bangalore - 562 107,Karnataka

Sanand, Ahmedabad • Shri Hari Oil Mill Compound, Near Muni Kripa Rice Mills, Opp. B/D Eye Hospital,Riramgam Road, Sanand, Distt. Ahmedabad-382 110, Gujarat

Lucknow • Plot No. 836, Banthara, Lucknow-Kanpur Highway, Sikandarpur, Tehsil & Distt.Lucknow, U. P., 227 101

Sharjah, UAE • Golden Harvest Middle East FZC(a Subsidiary Company)Plot P3-04, Post Box No. 9267, Sharjah Airport International Free Zone(SAIF)Sharjah, UAE

(xvi) Address for Correspondence:Any query relating to the shares of the Company for Shares held in Physical Form and Shares held in DematForm should be addressed to:i) M/s. Aarthi Consultants Pvt. Ltd.

1-2-285 Domalguda, Hyderabad – 500029Tel: 040 27638111 / 27634445 / 27642217 / 66611921 • Fax: 040 27632184Email: [email protected]

ii) For grievance redress and any queryMr. Qaiser P. Ansari, Company Secretary & Compliance Officer OR Mr. S. Ramamurthy, Chief FinancialOfficer, at the following addressAries Agro LimitedAries House, Plot No. 24, Deonar, Govandi (E), Mumbai – 400043Tel: 022 25564052 / 53 • Fax: 022 25564054Email: [email protected] Site: www.ariesagro.com

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DECLARADECLARADECLARADECLARADECLARATION BY TION BY TION BY TION BY TION BY THE CHAIRMAN & MANTHE CHAIRMAN & MANTHE CHAIRMAN & MANTHE CHAIRMAN & MANTHE CHAIRMAN & MANAAAAAGING DIRECTGING DIRECTGING DIRECTGING DIRECTGING DIRECTOR OR OR OR OR TTTTTO O O O O THETHETHETHETHECOMPLIANCE OF CODE OF CONDUCT IN PURSUCOMPLIANCE OF CODE OF CONDUCT IN PURSUCOMPLIANCE OF CODE OF CONDUCT IN PURSUCOMPLIANCE OF CODE OF CONDUCT IN PURSUCOMPLIANCE OF CODE OF CONDUCT IN PURSUANCE OF CLAANCE OF CLAANCE OF CLAANCE OF CLAANCE OF CLAUSE 49USE 49USE 49USE 49USE 49

(D) (II) OF THE LISTING AGREEMENT(D) (II) OF THE LISTING AGREEMENT(D) (II) OF THE LISTING AGREEMENT(D) (II) OF THE LISTING AGREEMENT(D) (II) OF THE LISTING AGREEMENT

It is hereby declared that all the Board Members and Senior Management Personnel of the Company have affirmed to theBoard of Directors, their compliance with the Code of Conduct of the Company pursuant to Clause 49 (D) (ii) of the ListingAgreement.

_________________________

Dr. Jimmy MirchandaniChairman & Managing Director

Date: 21.07.2010

CERCERCERCERCERTIFICATIFICATIFICATIFICATIFICATE FRTE FRTE FRTE FRTE FROM OM OM OM OM AAAAAUDITUDITUDITUDITUDITORS REGARDING COMPLIANCE OFORS REGARDING COMPLIANCE OFORS REGARDING COMPLIANCE OFORS REGARDING COMPLIANCE OFORS REGARDING COMPLIANCE OFCONDITIONS OF CORPORACONDITIONS OF CORPORACONDITIONS OF CORPORACONDITIONS OF CORPORACONDITIONS OF CORPORATE GOTE GOTE GOTE GOTE GOVERNVERNVERNVERNVERNANCEANCEANCEANCEANCE

AAAAAUDITUDITUDITUDITUDITORS’ORS’ORS’ORS’ORS’ CER CER CER CER CERTIFICATIFICATIFICATIFICATIFICATETETETETE

To the Members of Aries Agro Limited

We have examined the compliance of the conditions of Corporate Governance by Aries Agro Limited for the year ended 31stMarch, 2010, as stipulated in clause 49 of the Listing Agreements of the said Company with Stock Exchanges in India.

The compliance of the conditions of Corporate Governance is the responsibility of the Company’s Management. Ourexamination was carried out in accordance with Guidance Note of Certificate of Corporate Governance( as stipulated inClause 49 of the Listing Agreement), issued by the Institute of Chartered Accountants of India and was limited to the proceduresand implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance.It is neither an audit nor an expression of an opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us, we certify that the Companyhas complied with the conditions of Corporate Governance as stipulated in the above mentioned Listing Agreements.

We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency of effectivenesswith which the Management has conducted the affairs of the Company.

For Kirti D. Shah & AssociatesChartered Accountants

Kirti D. ShahMumbai Proprietor

Date: 21.07.2010 Membership No. 32371

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MANMANMANMANMANAAAAAGING DIRECTGING DIRECTGING DIRECTGING DIRECTGING DIRECTOR(MD) OR(MD) OR(MD) OR(MD) OR(MD) AND CHIEF FINAND CHIEF FINAND CHIEF FINAND CHIEF FINAND CHIEF FINANCIAL OFFICERANCIAL OFFICERANCIAL OFFICERANCIAL OFFICERANCIAL OFFICER(CFO) CER(CFO) CER(CFO) CER(CFO) CER(CFO) CERTIFICATIFICATIFICATIFICATIFICATIONTIONTIONTIONTION.....

We, the undersigned, in our respective capacities as Managing Director and Chief Financial Officer of Aries Agro Limited(“The Company”) to the best of our knowledge and belief certify that :

(a) We have reviewed the financial statements and the cash flow statement for the year ended on 31st March, 2010 andbased on our knowledge and belief we state that :-

i. These statements do not contain any materially untrue statement or omit any material fact or contain any statementthat might be misleading.

ii. These statements together present a true and fair view of the Company’s affairs and are in compliance withexisting accounting standards, applicable laws and regulations.

(b) We further state that to the best of our knowledge and belief there are no transactions entered into by the Companyduring the year, which are fraudulent, illegal or violative of the Company’s Code of Conduct. We hereby declare that allthe members of the Board of Directors and Management Committee have confirmed compliance with the Code ofConduct as adopted by the Company.

(c) We are responsible for establishing and maintaining internal controls and for evaluating the effectiveness of the sameover the financial reporting of the Company and have disclosed to the Auditors and the Audit Committee, deficienciesin the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose totake to rectify these deficiencies.

(d) We have indicated, based on our most recent evaluation, wherever applicable, to the Auditors and Audit Committee:

i. Significant changes, if any, in the internal controls over financial reporting during the year.

ii. Significant changes, if any, in the accounting policies made during the year and that the same has been disclosedin the notes to the financial statements; and

iii. Instances of significant fraud of which we have become aware and the involvement therein, if any, of themanagement or an employee having significant role in the Company’s internal control system over financialreporting.

Dr. Jimmy Mirchandani S. RamamurthyChairman & Managing Director CFO

Mumbai

21st July, 2010.

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MANMANMANMANMANAAAAAGEMENT DISCUSSION GEMENT DISCUSSION GEMENT DISCUSSION GEMENT DISCUSSION GEMENT DISCUSSION ANDANDANDANDANDANANANANANALALALALALYYYYYSISSISSISSISSISFORWARD LOOKING STATEMENTS

This report contains forward looking statements, which maybe identified by their use of words like ‘plans’, ‘expects’, ‘will’,‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’, orother words of similar meaning. All statements that addressexpectations or projections about the future, including butnot limited to statements about the Company’s strategy forgrowth, product development, market position, expendituresand financial results, are forward looking statements. Theseforward looking statements, which may include statementsrelating to future results of operations, financial condition,business prospects, plans and objectives, are based on thecurrent beliefs, assumptions, expectations, estimates, andprojections of the Directors and Management of the Company,about the business, industry and markets in which theCompany operates. These statements are not guaranteesof future performance, and are subject to known and unknownrisks, uncertainties, and other factors, many of which arebeyond Company’s control and difficult to predict, that couldalter actual results, performance or achievements to differmaterially from those in the forward looking statements. Suchstatements are not, and should not be construed, as arepresentation as to future performance or achievements ofthe Company. In particular, such statements should not beregarded as a projection of future performance of theCompany. It should be noted that the actual performance orachievements of the Company may vary significantly fromsuch statements.

MANUFACTURING BASE

Aries has expanded its manufacturing base in India andoverseas. As of the end of 2009-10, we have built up a totalmanufacturing capacity of 84,600 MT per annum spreadacross 6 factories in India and an additional 70,000 MT perannum at our 2 Units in Fujairah and Sharjah. This is arguablythe largest world class manufacturing base of specialty plantnutrition solutions set up by an Indian Company.

The Indian manufacturing operations are spread over 6 cities,namely Mumbai, Hyderabad, Bengaluru, Kolkata,Ahmedabad and Lucknow. Our largest and most state of theart manufacturing unit is located at Hyderabad with a capacityof 37,800 MT per annum, manufacturing our flagship brandsChelamin and Agromin Max. Ahmedabad is our first factorythat has facilities for the manufacture of bio-fertilizers,including our own in-house microbial breeding area. Lucknow

is our first production base located in North India.

GLOBAL SOURCING

In addition to our own manufacturing facilities, Aries hasreputed global suppliers of plant nutrient products located inSouth America, China, the Middle East, Iran, Italy, Israel andPoland. These global suppliers provide us with best in classraw materials for our Indian factories and exclusive Made-For-India products that we rebrand under the Aries brands.During the year 2009-10, imports constituted 39 % of ourtotal purchases, making global sourcing a key cost and qualitydriver for our business.

INDUSTRY TRENDS

2009-10 was a very difficult year for the agribusinessindustry due to the most intensive drought in severaldecades during the Kharif (summer) season, followed byfloods in many states just prior to the Rabi (winter) season.Continuing political instability in Andhra Pradesh and theEastern Region continued to cause major concerns. Theoverall agricultural scenario was bleak with total cropproduction reducing in both seasons significantly from117.70 million tones to 98.83 million tonnes (a fall of 16 %).Area under cultivation also shrunk by 6.50 %(46.18 LakhHectares). Total rainfall deficit was also reported at 23% ofthe Long Period Average. This was the most deficient SouthWest Monsoon since 1972.

Despite all these extremely difficult environmental factors,we have managed to achieve a revenue growth of 27 %.The Sales Revenues grew in all states across India, with theexception of Bihar and Chattisgarh. A summary of the state-wise revenue growth is presented below :

States with States with States with States withsales growth sales growth sales growth less thanabove 50% between between 15% sales

30% – 50% 15% - 30% growthKerala Andhra Pradesh North East West BengalJharkhand Tamil Nadu Maharashtra Chattisgarh

Orissa Madhya Pradesh RajasthanHaryana Gujarat Uttar PradeshHimanchalPradesh Uttarkhand PunjabKarnataka

The state-wise revenue share is also depicted in the chartbelow. It indicates the truly national reach of the Aries rangeof products.

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STSTSTSTSTAAAAATEWISE SHARE OF REVENUESTEWISE SHARE OF REVENUESTEWISE SHARE OF REVENUESTEWISE SHARE OF REVENUESTEWISE SHARE OF REVENUES Programmes, Post Master Training Sessions underMCX Grameen Suvidha Kendra Programme, SMSbased Crop and Weather Advisories, Exhibitions andExpos.

KRISHI VIGYAN VAHAN

Aries has a fleet of 100 Krishi Vigyan Vahans (KVVs) thathave travelled 11,24,168 kilometers and spread awarenessin 4,658 villages spread across 10 States during 2009-10.The objective of these Vehicles is to build awareness evenin the remote, unserviced markets by conducting FarmerBriefings, Structured Meetings and Audio VisualPresentations, providing Advisory Services, Mobile SoilTesting and Field Demonstrations.

Upon spreading the required knowledge and convincingpotential Consumers on the need and benefits of using theplant nutrients, the Aries staff on the KVVs book orders andprovide farmers with the locations of the nearest Dealer /Retailer. This tracks the impact of the extension activities ineach village and improves the throughput of the Aries Dealersand Retailers as the speed of liquidation increases with theseefforts. Insurance and other purchase incentives are providedto the Consumers once the purchase is completed atAuthorized Dealers, thus serving to retain Consumer loyalty.

The KVVs also collected over 30,000 soil samples for analysisand soil health cards were issued to the farmers, ensuringaccurate recommendations and scientific usage of plantnutrients. This service was extremely valued by the farmers.

Aries KVV operations and its methodology and success storywas captured in a Detailed News Report and Online VideoCase Study developed and published by The Wall StreetJournal, USA.

COST CONTROL

The Company based on erratic fluctuations in prices duringthe year 2008-09 had focused on monitoring the prices atfrequent intervals both in India and overseas. Accordingly,the Company due to stringent monitoring of costs couldmanage and restrict a marginal increase in costs during theFinancial Year 2009-10.

KEY DIFFERENTIATOR

Aries now has an enviable product base of 76 brands thatcan rival the world’s best and biggest plant nutritioncompanies. This vast range of cost-effective, world classproducts serves a major differentiator as it provides Ariesfarmers with the widest choice of customized plant nutrients,tailor-made for his crop and soil specific needs.

GROWTH DRIVERS

The growth despite adversity was achieved due to thefollowing key reasons:

1. Foray into International markets : 2009-10 saw Ariesproducts being sold in more export markets than inthe past. Our international sales increased by 469 %on a consolidated basis.

2. New products in domestic markets : 2009-10 sawa record launch of 15 new products, taking the totalproducts in the Aries range to include 76 brands. The15 new products included 4 India-first concepts ofEuropean bio degradable chelates, 5 Natural Aminoacid Chelates, a Marine Plant extract from Norway, aWater Treatment formulation, 2 Calcium Nitratederivatives and 2 imported Agricultural sprayers.

3. New Markets in India : The year also saw Ariesentering new markets like Kerala and Kashmir. Wenow have Aries products marketed in 24 states of India.In addition, we also actively began marketing toinstitutions and also scaled up our sales under Statedevelopment and drought/flood relief schemes. Ariesproducts are currently being sold in 1,75,000 villageslocated in 375 districts of the country.

4. Comprehensive Sales & Extension efforts : TheAries sales team worked tirelessly to sell in whichevermarkets water was available. This made the acquisitionof new farmers possible and increased our customerbase even in existing markets. Mindshare wasincreased using promotional activity that included (butwas not restricted to) Farmers Meetings,Demonstrations, Sampling, Train the Trainers

30

40th Annual Report 2009-2010INCREASING GLOBAL REACHAries International Sales have commenced in 4 Countriesthrough the Indian and the UAE factories. In addition, we arealso pursuing the registration of our products for commercialsale in Europe. We believe that with our Internationalmanufacturing base for Chelates, Sulphur Bentonite andwater soluble NPK fertilizers, we must actively expand ourglobal presence and be known as a production hub for cost-effective world class specialty plant nutrients for countriesbeyond India. Increasing our Global Reach is consideredstrategically important.

SULPHURM/S. Golden Harvest Middle East – a Subsidiary Companyof Aries has set up a unit namely Amarak Chemicals, FZC tomanufacture Sulphur Bentonite containing 90% elementalsulphur. This unit was showcased to the largest customersof Aries in April 2010 which has since commenced operations.M/S. Golden Harvest Middle East has invested AED 15.14Millions on this project having a capacity of 60,000 MT p.a.to produce Sulphur Bentonite.The current application of Suphur in Agriculture is 10 milliontons annually and the Sulphur Institute, USA, has estimated acurrent deficit in 2009-10 of 9.6 million tons annually. Thiseffectively means that farmers need to double the usage ofSulphur on their crops to optimize yields. The deficit is expectedto rise to 11.6 million tons annually by 2014. The largest existingmarkets are in Asia and the Americas, with the largest deficitbeing reported in India and China. India alone has an estimateddeficit in usage of Sulphur of 2.2 million tonnes per annum.Interestingly, there are only 15 manufacturing units for SulphurBentonite in the world and none of these are located in Asia,making Amarak a nearby, cost effective source for thisextremely critical plant nutrient. In fact, the deficit of Sulphur isbecoming so pronounced that it is being called the emergingfourth primary nutrient after NPK.Amarak projections indicate that with this high demandscenario expected to continue way into the future and withproximity to raw material sources and nearness to the marketswith the most demand, the project would ideally have a payback period of 2 ½ years.

OUTLOOKThe outlook for the 2010 monsoons seem positive with allexperts agreeing on a prediction of a normal rainfall with 98%of the Long Term Average precipitation. Timely onset andgood geo-spatial spread of the rains will certainly help inensuring a good Kharif sowing and consequent harvests.

Aries is looking at adding 3 new plant protection productsand 2 new plant nutrition products to our range during 2010-

11. This will add to the revenue growth potential. However,the seeds sales will be discontinued with effect from the Rabi2010 season due to supply constraints from the growers,unfamiliar market dynamics and slow growth.

The sales teams will also be increasing sales and extensionactivities three-fold to further improve the demand creationprocess. To complement these intensive promotional efforts,approx. 100 new KVVs will be added during the year inapprox. 5-6 States.

RISKS AND CONCERNSVolatile raw material prices, especially of metals, sulphur andChelating Agents which are critical inputs for Aries and itssubsidiaries remain a matter deserving constant attention.Steps are being taken to contract for longer terms and keepinventory costs within an acceptable range.The industry is witnessing the entry of new organized players,including some commodity fertilizer companies in themicronutrient sector. New players may cause price pressuresfrom time to time but will in the long term, increase theawareness levels in key markets. However the brand strength,superior product performance, unique manufacturingprocesses and customer loyalty will ensure that Aries meetsthe challenge of new entrants head on. A few new organizedplayers will only help expand a fast growing market.The dependence on the monsoons remains a core challenge.However, our geographical spread, international presenceand products customized to 107 crops should keep us fairlyinsulated from a significant aggregate revenue impact.Individual states, especially those with no or low irrigationfacilities will however be affected and staff may need to bemoved to areas where rains are normal or where water isavailable through irrigation.Increased need for sales staff, widespread extension activitiesand promotional efforts, including the KVV fleet, to combatnew entrants and promote a new range of concept basedproducts will increase fixed selling and marketing costs.However the increased cost as a percentage of sales maynot be very significant as revenues are expected to rise higherin proportion to the cost additions due to these efforts.Increased global sourcing and sales will need us to beprepared for exposure to international pricing and foreignexchange fluctuations.

SEGMENTWISE / PRODUCTWISE PERFORMANCEThe Company has only one Reportable Segment in terms ofAccounting Standard 17 issued by the Institute of CharteredAccountants of India .

INTERNAL CONTROL SYSTEMThe Company has an extensive system of internal controls to

31

ensure optimal utilization of resources and accurate reportingof financial transactions and strict compliance with applicablelaws and regulations. The Company has put in place sufficientsystems to ensure that assets are safeguarded against lossfrom unauthorized use or disposition, and that transactionsare authorized, recorded and reported correctly.

FINANCIAL PERFORMANCE:The Company’s Turnover for the financial year ended March31, 2010 increased to Rs.13,974.61 Lakhs from Rs. 11,044.42Lakhs in the previous year, registering a growth of 27%.Total expenses for the year were Rs. 14,173.99 Lakhs asagainst Rs. 11,294.66 Lakhs in the previous year.Profit Before Tax increased to Rs. 1,894.12 Lakhs during theyear as against Rs. 503.73 Lakhs in the previous year. Theincrease in Profit Before Tax translates to 14% of FY 09-10Sales.Tax provision for the year was Rs. 638.09 Lakhs as againstRs. 192.96 Lakhs in the previous year which translates to5% on FY 09-10 Sales.Profit After Tax for the year was Rs. 1,256.03 Lakhs as againstRs. 310.77 Lakhs in the previous year which is 9% of FY 09-10 Sales.

RESOURCES AND LIQUIDITY:As on March 31, 2010, the net worth of the Company stoodat Rs. 9,823.10 Lakhs as against Rs. 8,936.47 Lakhs.As on March 31, 2010, the Company had a Debt / Equityratio of 0.89. The Company has not raised any Fixed Depositsfrom the public.

HUMAN RESOURCES:As at the end of the financial year there were 612 employeesunder the permanent rolls and a few under contract. We havean ongoing arrangement with M/s Manoj Enterprises Hosur– 635109, for supplying of labourers for our packaging activityat our Bangalore Unit. The agreement is revalidated everyyear and can be renewed as per our Company’s discretion.We also have an arrangement with M/s. Professional SecurityServices and Labour Suppliers and M/s. L. S. Enterprises atHyderabad for supply of labourers on contract basis for ourPashamylaram Unit. Similarly we have an arrangement withM/s Proloy Enterprise for supplying of workers for production/packing, loading and unloading etc. for our Kolkata Unit andan identical arrangement has been made for Sanand Unitwith M/s. Jay Laxmi Security & Labour Service. In addition,similar arrangement has been made for Lucknow Unit withM/s. Standard Active Security Services.

We have 115 workers in our permanent employment andsizeable numbers on contract working in our factories. Thedetailed breakup of the same is as under:

Sr. No. Particular Employees

1. Skilled 56

2. Semi-Skilled 10

3. Unskilled 49

Sub- Total 115

4. Contract Labour 140

TOTAL 255

The Department wise breakup of our manpower is as under:

Sr. No Name of the Department No. of Staff

1. Accounts 25

2. Administration 99

3. Director 02

4. Personnel & Administration 03

5. Production (Staff) 25

6. Production (Workers) 115

7. Research & Development 09

8. Sales 327

9. Spray Dry Operator 05

10. Legal & Secretarial 02

TOTAL 612

HEALTH/ SAFETY/ENVIRONMENT SENSITIVITY

HEALTH THROUGH NUTRITION:

The Company promotes “Balanced Nutrition as aNational Imperative”, building resistance of crops topests and diseases and hence lowering the usage ofharmful and expensive pesticides

ENVIRONMENT SENSITIVITY:

All Aries products are based on the philosophy of “Useless chemicals and use safe chemicals” – low doses ofchemically inert and cost effective nutrient complexes

The entire range of Aries Chelates are environmentallysafe

NON POLLUTING:

All Aries factories have zero effluents and produce noharmful emissions

32


Through our products and our passion, Aries continuallydemonstrates that we are a responsible corporate citizen, workinghard to retain the delicate balance of nature and the developmentof communities where we work and grow.PROVIDING ENVIRONMENTALLY SENSITIVE PRODUCTSThe Aries range of Chelated micronutrients is chemically inert.All our flagship brands contain no harmful ingredients and donot react with soil and water based elements. Moreover, we haveshown further commitment to ensure that our products areenvironmentally safe by introducing next generation biodegradable chelates for the first time in India. This now ensuresthat our farmers have a choice of using 100% safe products ontheir crops with no residues and a favourable cost benefit ratio.PROMOTING WATER SOLUBLE PACKAGINGOur flagship brand Chelamin and the entire bio degradable rangeof Chelates are packed in single dose, dissolvable sachets. Thisensures that the product is delivered with no plastics or foil basedpackaging. We have thus moved beyond environmentallysensitive products, to include eco-friendly packaging for keybrands.SPREADING KNOWLEDGEAries formed the pioneer young farmer network within theConfederation of Indian Industry’s Young Indians. This networkengages 8000 farmer members, all below 40 years of age, inknowledge dissemination activities. The year’s theme for the CII-Yi-Aries Agro farmer network was building a dialogue towardsevolving a framework for Indian Good Agricultural Practices (Indo-GAP). Dr Rahul Mirchandani, Executive Director, served as theNational Chairman for CII’s Young Indians (2009-10) and is thearchitect of the Yi farmers net programme.Over 175 knowledge dissemination activities were undertakenacross 11 states impacting over 11000 farmers and 4000 ruralchildren from agricultural communities. These events exposedfarmers to best practices using study tours and workshops,connected them with Agricultural Universities and also educatedRural school students in over 65 secondary schools on latestagricultural practices that will help improve productivity andconsequently improve the ecosystem of wealth creation in ruralcommunities.Specifically, the programs included Uniconnect – a structuredlab to land programme that connects university faculty,researchers and students with young farmers, Suryodaya–farmers training in local areas and Bal Krishak Sambodhansessions in rural schools – Guest lectures by experts to exposehigher secondary school students to the latest agriculturalmethods making them ‘future ready’.We also conducted two very successful National Agromaxconferences in Guwahati, Assam and in Hissar, Haryana.Together these two flagship events had close to 4000 youngfarmers in attendance and had a galaxy of over 40 speakersand involved CII’s Young Indians, 5 State Governments, 9Agricultural Universities and many agribusiness corporates.

COPING WITH CLIMATE CHANGEAries surveyed over 800 Yi-farmers net members and prepareda comprehensive document that captured ways in which Youngfarmers are affected by and coping with Climate Change. Thisreport was prepared and submitted to The Climate Project forthe United Nations Copenhagen Summit.PHILANTHROPYDuring the year under review, Aries Agro supported NGOsincluding the National Association of the Blind, Gujarat StateBranch and Srishti Foundation, Andhra Pradesh. The supportextended included Announcement Sound Systems in the Schoolfor blind students and funds to feed nutritious meals to thousandsof elderly persons and children in the Kakinada District of AndhraPradesh.ENCOURAGING INNOVATIONYi-Aries Agro farmers net has also begun an iterative process ofidentifying 10 farmers each year who have achieved superlativelevels of productivity and documenting and evangelizing theseinnovative crop management methods as ‘Farming NextPractices’.PROVIDING ADVISORY SERVICESFarmers were also provided with commodity prices, cropadvisories and weather alerts throughout the year using mobilephone text messages. In addition, using our analytical labs andmobile soil testing units, over 30,000 soil samples were analysedacross the country and soil health cards issued to farmers atsubsidized prices.Aries has also signed an MoU with the Multi Commodity Exchangeof India (MCX) to provide deferred live commodity prices over theInternet and also to participate in the MCX Grameen SuvidhaKendra (GSK) project. Aries has trained Post Masters at 768 IndiaPost offices in the essentials of crop nutrition and the Post Mastersare now information disseminators and booking agents for a selectrange of Aries specialty plant nutrients. The Post Office also collectsand manages farmer queries and responses using the e-Postsystem.CERTIFYING ESSENTIAL SKILLSWe have, in collaboration with CII’s Young Indians, MultiCommodity Exchange of India (MCX) and KIIT University,Bhubaneswar, commenced work on piloting a world class skillscertification program in the Agriculture sectors. These programswill take the form of short courses to train youth in rural areasthe essential skill of grading and standardising agricultural output.Since mandis are currently using highly unscientific and adhocmethods to finalise the auction prices of agri output, the ‘certifiedgraders’ will be regarded in the community as having thequalification and expertise to provide farmers with the right priceand assist buyers in procuring standardized crop output. Thiswill improve the employability prospects of youth involved in ruralsectors, improve farmer price discovery and also plug a crucialskill gap that exists.

REPORREPORREPORREPORREPORT ON CORPORAT ON CORPORAT ON CORPORAT ON CORPORAT ON CORPORATE SOCIAL RESPONSIBILITYTE SOCIAL RESPONSIBILITYTE SOCIAL RESPONSIBILITYTE SOCIAL RESPONSIBILITYTE SOCIAL RESPONSIBILITY

33

i. We have audited the attached Balance sheet of ARIESAGRO LIMITED, as at 31st March, 2010 and also theannexed Profit & Loss Account and Cash FlowStatement of the Company for the period ended on thatdate annexed thereto. The preparation of financialstatements is responsibility of the companymanagement. Our responsibility is to express an opinionon these financial statements based on our audit.

ii. We conducted our audit in accordance with auditingstandards generally accepted in India. Thosestandards require that we plan and perform the auditto obtain reasonable assurance about whether thefinancial statements are free of material misstatement.An audit includes

(a) examining, on a test basis, evidence to supportthe financial statement amounts and disclosuresin the financial statement

(b) assessing the accounting principles used in thepreparation of financial statements

(c) assessing significant estimates made by themanagement in the preparation of the financialstatements and

(d) evaluating overall financial statementpresentation.

We believe that our audit provides a reasonable basisfor our opinion

iii. As required by the Companies (Auditor’s Report)Order, 2003 issued by the Central Government in termsof section 227(4A) of the Companies Act, 1956, wegive in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred toin paragraph (3) above, we report that:

a. We have obtained all the information andexplanations which, to the best of our knowledgeand belief, were necessary for the purposes ofour audit;

b. In our opinion, proper books of accounts asrequired by law, have been kept by the Companyso far as appears from our examination of thebooks of the Company;

c. The Balance Sheet and the Profit and LossAccount and Cash Flow Statement referred toin this report are in agreement with the booksof accounts of the Company

d. In our opinion, the Balance Sheet and Profit &Loss Account and Cash Flow Statement dealtwith by, this report comply with all materialrespects with the accounting standards referredto in sub-section (3C) of section 211 of theCompanies Act, 1956 except as under:.

Non Provision of Leave Encashment – as perAccounting Standard 15 (See note 4 to Notesto Accounts)

e. On the basis of written representations receivedfrom the directors, and taken on record by theBoard of Directors, in our opinion, none of thedirectors is disqualified from being appointedas director u/s 274(l)(g) of Companies Act, 1956;

f. The company is not a sick company within themeaning of section 3(1) (o) of the SICA Act,1985. Hence there is no question of payment ofcess as required under section 441 A ofCompanies Act;

g. In our opinion and to the best of our informationand according to the explanations given to us,the said Balance Sheet and the Profit & LossAccount and Cash Flow Statement, togetherwith notes thereon, give the information requiredby the Companies Act, 1956 in the manner sorequired and give a true and fair view inconformity with the accounting principlesgenerally accepted in India

i. in the case of the Balance Sheet, of thestate of affairs of the Company as at 31st

March, 2010,

ii. in the case of the Profit and Loss Account,of the profit of the Company for the periodended on that date.

iii. in the case of the Cash Flow Statement,of the cash flows for the period ended onthat date.

For Kirti D Shah & AssociatesChartered Accountants

Kirti D. ShahPlace: Mumbai ProprietorDate: 21st July, 2010 Membership No. 32371

AUDIT REPORT TO THE SHARE HOLDERS OF ARIES AGRO LIMITEDAUDIT REPORT TO THE SHARE HOLDERS OF ARIES AGRO LIMITEDAUDIT REPORT TO THE SHARE HOLDERS OF ARIES AGRO LIMITEDAUDIT REPORT TO THE SHARE HOLDERS OF ARIES AGRO LIMITEDAUDIT REPORT TO THE SHARE HOLDERS OF ARIES AGRO LIMITED

34


In terms of the information and explanations given to us andthe books and records examined by us in the normal courseof audit and to the best of our knowledge and belief, westate as under:

i. a. The Company has maintained proper recordsshowing full particulars including quantitativedetails and situation of its fixed assets.

b. These fixed assets were physically verifiedby the management during the period. We havebeen informed that no material discrepancieswere noticed on such physical verification.

c. Substantial parts of fixed assets have not beendisposed off during the period, which will affectits status as going concern.

ii. a. The stock of inventory has been physicallyverified during the period by the managementat reasonable intervals.

b. In our opinion, the procedures of physicalverification of inventory followed by themanagement are reasonable and adequate inrelation to the size of the company and thenature of its business.

c. The company is maintaining proper records ofinventory. No discrepancies were noticed onphysical verification of stocks as compared tobook records and hence the question ofwhether the same have been properly dealtwith the books of accounts does not arise.

iii. a. The company has taken loan from one partycovered in the register maintained under

section 301 of the Companies Act, 1956. Themaximum amount outstanding during the yearwas Rs. 10,200,000/-(Previous Year Rs.1,700,000/-) and closing balance as on 31/03/2010 is Rs. NIL/- (Previous YearRs. 1,700,000/-)

b. The Company has given interest free advancesto five parties covered in the Registermaintained under Section 301 of the CompaniesAct, 1956. The maximum amount outstandingduring the period ended 31/03/2010 is Rs.45,609,594/- (Previous Year Rs. 19,468,816/-) and closing balance as on 31/03/2010 is Rs.45,012,584/- (Previous Year Rs.19,363,643/-)

c. The Company has given loan to its subsidiaryGolden Harvest Middle East FZC. The maximumbalance outstanding during the period ended31/03/10 is Rs. 267,847,108/- ( Previous YearRs. 267,847,108/- ) and closing balance as on31/03/10 is Rs. 236,051,682/- ( Previous YearRs. 267,847,108/- ). For this purpose thecompany has taken loan from ICICI Bahrain.The interest paid on loan is recovered fromsaid Subsidiary.

d. As per information and explanation providedto us, the loans granted by the Company exceptthe loan granted to Golden Harvest Middle EastFZC mentioned in clause ‘c’ above, are interestfree. However other terms and conditions onwhich such loans and advances given toCompanies, Firms or Other Parties listed in theRegister maintained under section 301 are not,prima facie, prejudicial to the interest of theCompany.

e. The Company is regular in repaying the principalamounts as stipulated and has been regular in

ANNEXURE ANNEXURE ANNEXURE ANNEXURE ANNEXURE TTTTTO O O O O THETHETHETHETHEAAAAAUDITUDITUDITUDITUDITORS' REPORORS' REPORORS' REPORORS' REPORORS' REPORTTTTT(This is the Annexure referred to in our Reportof even date)

35

the payment of interest wherever applicable

f. As per the information given by themanagement, in case of overdue amount morethan Rs.1.00 lakhs, the reasonable steps havebeen taken by the company for recovery ofthe principal and Interest.

iv. In our opinion, there is an adequate internal controlsystem commensurate with the size of the Companyand the nature of its business, for the purchase ofinventory and fixed assets and for the sale of goods.In our opinion, there is no continuing failure to correctmajor weaknesses in internal control.

v. a. According to the information and explanationprovided by the management, we are of theopinion that the particulars of contracts orarrangements that need to be entered in theRegister maintained under section 301 havebeen so entered.

b. The transactions made in pursuance ofcontracts or arrangements entered in theRegister maintained under section 301 andexceeding value of Rupees Five Lakhs inrespect of any party during the period havebeen made at prices which are reasonablehaving regard to the prevailing market pricesat the relevant time.

vi. The Company has not accepted deposits from thepublic. Hence, the question of complying the directivesissued by the Reserve Bank of India and theprovisions of sections 58A and 58AA of the Act andthe rules framed there under, where applicable, doesnot arise.

vii. The company has appointed a firm of CharteredAccountants for carrying out the internal audit, whosescope of work, according to our information, is

commensurate with the size of the Company andnature of its business

viii. We have broadly reviewed the books of accountmaintained by the company pursuant to the rules madeby the central government for the maintenance of thecost records under section 209 (1) (d) of the act andare of the opinion that Prima facie the prescribedaccounts and records have been made andmaintained by the company. We have not, howevermade a detailed examination of the same. The Companyhas appointed a cost accountant to carry out theCost Audit.

ix. a. The company is generally regular in depositingstatutory dues including Provident Fund,Investor Education and Protection Fund,Employee State Insurance, Income Tax, SalesTax, Wealth Tax, Service Tax, Custom Duty,Excise Duty, Cess and any other statutory duesexcept some occasional delays. As per theinformation given by the management andapparent from the records the undisputedliabilities as on 31st March 2010 was Rs. NIL

b. Details of disputed liability in respect of taxdues on account of Income Tax, Sales Tax,Service Tax, Custom Duty, Excise Duty, Cesstogether with the status and the Forum beforewhich such dispute is pending as on 31stMarch 2010 is as per Annexure 1 attached toand forming part of this report.

x. The company has no accumulated losses. Thecompany has not incurred cash losses in the financialperiod under report and in the financial periodimmediately preceding such financial period.

xi. The company has not defaulted in repayment of duesto a financial institution or bank. The Company hasnot obtained any borrowings by way of debenture.

36


xii. According to the records of the company, thecompany has not granted any loans and advanceson the basis of security by way of pledge of shares,debentures and other securities.

xiii. The company is not a chit fund, Nidhi or mutual benefitfund/society.

xiv. The company is not dealing or trading in shares,securities, debentures and other investments. Theshares held by the Company have been held by theCompany in its own name.

xv. The company has not given any guarantee for loanstaken by others from Banks or financial institutions.

xvi. The company has taken a term loan which has beenutilized for the purpose for which such loans wereobtained.

xvii. The funds raised on short-term basis have not beenused for long term investment and vice versa.

xviii. According to the records of the Company and theinformation and explanation provided by themanagement, the company has not made any

preferential allotment of shares to parties andcompanies covered in the Register maintained undersection 301 of the Act.

xix. The Company has not issued any debentures hencethe clause XIX of the said order is not applicable tothe company.

xx. The Company has not raised any Capital during theyear and hence the question whether the managementhas disclosed the end use of money raised by publicissues and whether the same has been verified byus or not does not arise.

xxi. During the checks carried out by us, any fraud on orby the Company has not been noticed or reportedduring the period under report.


Kirti D. ShahPlace : Mumbai Proprietor

Date : 21st July, 2010 Membership No. 32371

37

ANNEXURE 1 ANNEXURE 1 ANNEXURE 1 ANNEXURE 1 ANNEXURE 1 TTTTTO O O O O AUDITAUDITAUDITAUDITAUDITORS REPORORS REPORORS REPORORS REPORORS REPORT (CLAT (CLAT (CLAT (CLAT (CLAUSE IX-B)USE IX-B)USE IX-B)USE IX-B)USE IX-B)Details of disputed statutory dues outstanding as on 31st March, 2010

Nature of Dues Period to Forum where the Particulars of Dispute Taxwhich dispute is pending Outstanding

paymentrelates

Sales Tax 1994-1995 Hon’ble Trade Tax Tribunal, Applicability of C Form on 93,173 (Kanpur) (U.P.) interstate sale of poultry

products

Sales Tax 1985-1986 Tribunal Classification of goods 175,000 ( Kanpur)

Vat (Maharashtra) 2006-2007 DC of Sales Tax Appeal-3, Levy of Penalty 538,920Mumbai

Sales Tax (Lucknow) 2009-2010 Joint Commissioner Appeal-3, Levy of Penalty 244,000Commercial Tax Department,Lucknow

Income Tax 2005-2006 Income Tax Appellate Tribunal Disallowance of Notional 2,223,927 Interest on Advances given

38


BBBBBALANCE SHEET ALANCE SHEET ALANCE SHEET ALANCE SHEET ALANCE SHEET AS AS AS AS AS AAAAAT 31ST MART 31ST MART 31ST MART 31ST MART 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010

Particulars Schedule As at As atNo. 31 March 31 March

2010 2009Rupees Rupees

I. SOURCES OF FUNDSSHAREHOLDERS’ FUNDS(a) Share Capital 1 130,043,390 130,043,390(b) Reserves and Surplus 2 934,395,470 848,536,651

1,064,438,860 978,580,041

LOAN FUNDS(a) Secured Loans 3 784,734,939 650,138,627(b) Unsecured Loans 4 90,628,878 54,751,446

875,363,817 704,890,073

DEFERRED TAX LIABILITY / (ASSET) 14,883,932 4,575,005

TOTAL 1,954,686,609 1,688,045,119

II. APPLICATION OF FUNDSFIXED ASSETS(a) Gross Block 5 406,074,382 357,655,066(b) Less :- Depreciation 83,017,364 66,961,073

323,057,018 290,693,994

CAPITAL WORK IN PROGRESS 6 157,277,529 192,131,208INVESTMENTS 7 146,404,500 65,748,000CURRENT ASSETS, LOANS & ADVANCES(a) Inventories 8 468,676,765 503,568,936(b) Sundry Debtors 9 695,217,543 493,515,572(c) Cash & Bank Balances 10 67,692,245 3,715,394(d) Loans and Advances 11 477,362,931 435,826,859

1,708,949,484 1,436,626,762

Less: CURRENT LIABILITIES AND PROVISIONS(a) Current Liabilities 12 322,376,209 276,002,021(b) Provisions 58,625,713 21,152,823

381,001,923 297,154,844

NET CURRENT ASSETS 1,327,947,561 1,139,471,918TOTAL 1,954,686,609 1,688,045,119

. Significant Accounting Policies & Notes on Accounts 19

As per our report of even dateFor Kirti D Shah & AssociatesChartered AccountantsKirti D ShahProprietorMembership No 32371Place : Mumbai.Date : 21st July, 2010

For and on Behalf of the Board

Dr. Jimmy Mirchandani Dr. Rahul Mirchandani Mr. Akshay MirchandaniChairman & Managing Director Executive Director Director

Dr. D. S. Jadhav Prof R S S Mani Mr. C. B. ChhayaDirector Director Additional Director

Mr. S. Ramamurthy Mr. Qaiser P. AnsariChief Financial Offier Company Secretary

39

PRPRPRPRPROFIT & LOFIT & LOFIT & LOFIT & LOFIT & LOSS OSS OSS OSS OSS AAAAACCOUNT FOR CCOUNT FOR CCOUNT FOR CCOUNT FOR CCOUNT FOR THE THE THE THE THE YEARYEARYEARYEARYEAR ENDED 31ST MAR ENDED 31ST MAR ENDED 31ST MAR ENDED 31ST MAR ENDED 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010

Particulars Schedule Year Ended Year EndedNo. 31 March 31 March


I. INCOME(a) Sales 1,397,461,273 1,104,441,882(b) Other Income 13 39,494,621 16,338,154(c) Increase/(Decrease) in stock 14 169,855,161 59,058,540

Total Revenue 1,606,811,055 1,179,838,576

II. EXPENDITURE(a) Consumption of Materials 15 780,235,800 548,799,715(b) Manufacturing Expenses 16 76,105,855 75,696,280(c) Interest and Financial charges 86,762,166 58,130,722(d) Payment to & for Employees 17 119,109,242 94,207,837(e) Administration & Other Expenses 18 339,201,994 342,927,759(f) Depreciation 15,983,598 9,703,540

1,417,398,656 1,129,465,854

III. Profit Before Tax (PBT) 189,412,400 50,372,722IV. Provision for Taxation

( i ) Income taxCurrent Tax 53,000,000 8,300,000Deferred Tax 10,308,927 7,995,996

( ii ) Fringe Benefit tax – 2,800,000( iii ) Wealth tax 500,000 200,000

63,808,927 19,295,996V Profit After Tax (PAT) 125,603,473 31,076,726

Less: Prior Period Items 13,211,626 –Short Provision for Tax in Earlier Years 982,296 18,280,761

VI Balance brought forward from Previous Year 255,609,787 242,813,822VII Amount available for Appropriations 367,019,338 255,609,787VIII Appropriations

Transfer to General Reserve 15,000,000 –Proposed Dividend 19,506,509 –Tax on Proprosed Dividend 3,239,790 –

IX Balance Carried to Balance Sheet 329,273,038 255,609,787

Basic & Diluted Earning per Share of Face Value of Rs. 10/- each 9.66 2.39Significant Accounting Policies & Notes on Accounts 19






40


STSTSTSTSTANDANDANDANDANDALALALALALONE STONE STONE STONE STONE STAAAAATEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLOOOOOWS FOR WS FOR WS FOR WS FOR WS FOR THE THE THE THE THE YEARYEARYEARYEARYEARENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010

Particulars Year Ended Year Ended31 March, 2010 31 March, 2009

Rupees RupeesA) Cash Flow from Operating Activities :-

Net Profit Before Tax and Extraordinary Items 1,894.12 503.73Adjustments for :-Depreciation 159.84 97.04Proposed Dividend / Dividend Distribution Tax (227.46) -Income-tax & Fringe Benefit Tax paid (535.00) (113.00)Prior Period Taxes (9.82) (182.81)Prior Period Expenses (132.12) -Interest / Dividend being income from Investing Activities (253.96) (163.23)Interest Expense being Cash flow for Financing Activities 867.62 581.31(Profit)/Loss on sale of Fixed Assets being Cash Flow on a/c of Investing Activities 20.42 4.34

Cash Flow from Operations before Working Capital Changes 1,783.64 727.38(Increase) / Decrease in Inventories 348.92 (2,937.27)(Increase) / Decrease in Trade Receivables (2,017.02) (1,026.03)(Increase) / Decrease in Loans & Advances (415.36) 124.47Increase / (Decrease) in Current Liabilities and Provisions 838.47 99.82

Cash Flow from Operating Activities 538.65 (3,011.63)

B) Cash Flow from Investing Activities :-Purchase of Fixed Assets, Capital Work In Progress & Advances on Capital A/c (202.36) (1,345.76)Increase in Investments incl. Share Application Money (806.57) (0.35)Proceeds on Sale of Fixed Assets 18.96 15.09Interest Received 253.96 163.23

Cash Flow from Investing Activities (736.00) (1,167.78)

C) Cash Flow from Financing Activities :-Increase / (Decrease) in Borrowings 1,704.74 4,741.31Interest Paid (867.62) (581.31)

Cash Flow from Financing Activities 837.12 4,160.00

Net Increase / (Decrease) in Cash & Cash Equivalents ( A+B+C ) 639.77 (19.41)Cash & Cash Equivalents at the Beginning of the Year 37.15 56.56

Cash & Cash Equivalents at the End of the Year 676.92 37.15

(Rs. in Lakhs)






41

SCHEDULES SCHEDULES SCHEDULES SCHEDULES SCHEDULES ANNEXED ANNEXED ANNEXED ANNEXED ANNEXED TTTTTO O O O O AND FORMING PAND FORMING PAND FORMING PAND FORMING PAND FORMING PARARARARART OF BT OF BT OF BT OF BT OF BALANCE SHEETALANCE SHEETALANCE SHEETALANCE SHEETALANCE SHEETAS AS AS AS AS AAAAAT 31ST MART 31ST MART 31ST MART 31ST MART 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010

Particulars As at As at31 March, 2010 31 March, 2009

Rupees Rupees

SCHEDULE 1 - SHARE CAPITAL

Authorised15,000,000 Equity Shares of Rs. 10/– each 150,000,000 150,000,000(Previous year 15,000,000 Equity Shares of Rs. 10/– each)

150,000,000 150,000,000

Issued, Subscribed and Paidup13,004,339 Shares of Rs.10/– each. The Capital includes 6,600,700shares of Rs.10/– each issued as Bonus Shares 130,043,390 130,043,390

PER BALANCE SHEET 130,043,390 130,043,390

SCHEDULE 2 - RESERVES AND SURPLUS

GENERAL RESERVE

Balance b/f 17,956,310 –

Add : Transfer from Profit & Loss A/c 15,000,000 17,956,310

32,956,310 17,956,310

SHARE PREMIUM

Balance b/f 490,037,050 490,037,050

490,037,050 490,037,050

REVALUATION RESERVE

Balance b/f 84,933,505 87,737,938

Less : Depreciation on Revalued assets 2,804,433 2,804,433

82,129,072 84,933,505

PROFIT & LOSS ACCOUNT (as per annexed a/c) 329,273,038 255,609,787

329,273,038 255,609,787


42



Rupees Rupees

SCHEDULE 3 - SECURED LOANSTerm LoansFROM BANKS 26,835,341 48,547,732(Against charge created on Company’s Asset i.e.Motor vehicles)Repayable within one year Rs. 14,367,654/–(Previous year Rs. 32,505,447/–)FROM BANKS – ICICI BANK BAHRAIN 239,005,728 271,186,230(Foreign Currency Loan – Secured against Equitable Mortgage ofLand and Building and personal guarantee of Directors)Repayable within one year Rs. 9,589,736/–(Previous year Rs. 834,416/–)FROM COMPANY 295,152 –(Against charge created on Company’s Asset i.e.Motor vehicles)Repayable within one year Rs. 53,715/–(Previous year Rs. NIL)

Cash Credit / Overdraft / Working Capital Demand Loan(WCDL) / Buyers CreditFROM BANKSHDFC BANK – BUYER’S CREDIT 30,290,823 33,522,108(Against charge created on Company’s Inventory, Book Debtsand Plant & Machinery and guaranteed by Directors)ICICI BANK – BUYER’S CREDIT 38,281,591 42,858,099(Against charge created on Company’s Inventory, Book Debtsand Plant & Machinery and guaranteed by Directors)INDIAN OVERSEAS BANK - CASH CREDIT – 81,333,162(Against charge created on Company’s Inventory, Book Debtsand Plant & Machinery and guaranteed by Directors)HDFC BANK - WCDL 100,000,000 86,329,105(Against charge created on Company’s Inventory, Book Debtsand Plant & Machinery and guaranteed by Directors)ICICI BANK - CASH CREDIT 119,635,438 86,362,191(Against charge created on Company’s Inventory, Book Debtsand Plant & Machinery and guaranteed by Directors)CANARA BANK - CASH CREDIT 135,394,748 –(Against charge created on Company’s Inventory, Book Debtsand Plant & Machinery and guaranteed by Directors)YES BANK – WCDL / BILL DISCOUNTING 94,996,118 –(Against charge created on Company’s Inventory, Book Debtsand Plant & Machinery and guaranteed by Directors)


43


Rupees Rupees

SCHEDULE 4 - UNSECURED LOANS(i) FROM BANKS

HDFC BANK (Guaranteed by Directors) 45,329,747 30,555,671Secured by charge on personal Assets of DirectorsRepayable within one year Rs. 11,635,902/–(Previous year Rs. 3,254,319/–)Repayable within one year Rs. 4,49,96,118/–(Previous year Rs. NIL)

(ii) FROM SHAREHOLDERS – 381,000Interest Accrued & Due on Above – 4,758

(iii) LOAN FROM DIRECTORS – 1,700,000(iv) SECURITY DEPOSIT – TRADE 45,299,131 22,110,017(v) LOAN FROM HOLDING COMPANY – –


SCHEDULE 5 - FIXED ASSETSGross block 406,074,382 357,655,066Less :- Depreciation 83,017,364 66,961,073(As per Separate Statement attached)


SCHEDULE 6 - CAPITAL WORK IN PROGRESS 157,277,529 192,131,208


SCHEDULE 7 - INVESTMENTSA. Invetments in Government or Trust Securities ( Unquoted )

National Saving Certificates(Deposited with BMC for plot at Deonar, Mumbai and for S.S.I. 13,000 13,000Registration deposited with Industrial Department, Hyderabad)

B. Unquoted at CostTRADEInvestment in Subsidiariesa) In Shares of Aries Agro Care Pvt Ltd ( Wholly Owned)

10,000 Equity Shares of Rs 10/- each 100,000 100,000b) In Shares of Aries Agro Equipments Pvt Ltd ( Wholly Owned)

10,000 Equity Shares of Rs 10/- each 100,000 100,000c) In Shares of Golden Harvest Middle East FZC

1) 1,125 Equity Shares of AED 100/- each Rs. 1,227,375/-( Previous Year Rs. 1,227,375/-)2) Shareholders Current A/c Rs. 144,889,125/-(Previous Year Rs. 64,232,625/-) 146,116,500 65,460,000

d) In Shares of Aries Agro Produce Pvt Ltd7,500 Equity Shares of Rs 10/- each 75,000 75,000


SCHEDULE 8 - INVENTORIES(At lower of cost or Net Realisable Value)(As Certified and valued by the Management)Finished / Traded Goods 347,594,639 221,566,114Finished / Traded Goods-in-Transit 2,826,250 –Raw Materials 39,015,091 204,740,918Packing Materials 79,240,785 77,261,904


44

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Rupees Rupees

SCHEDULE 9 - SUNDRY DEBTORSUnsecured - Considered GoodOutstanding for a period exceeding six months 268,369,529 179,617,616Others 426,848,014 313,897,956


SCHEDULE 10 - CASH AND BANK BALANCESCash on hand 49,309 46,859With Scheduled Banks on Current Account 67,642,936 3,668,535


SCHEDULE 11 - LOANS & ADVANCESUnsecured - Considered GoodLoans & AdvancesAdvances recoverable in cash or in kind or for value to be received- to Subsidiary Companies 259,724,114 282,711,215- to Companies under management in which Directors are interested 21,340,152 16,336,803- Margins For Letter of Credit 9,290,616 5,241,655- Margin for Bank Guarantees 1,989,625 2,606,312- Advances to Suppliers 157,602,149 99,036,919- Advances to Staff Against Expenses 3,937,911 5,364,973- Amount recoverable from Directors – 453,425- Advance Rent 37,375 –Staff Loans 598,113 1,338,086Sundry Deposits 4,933,499 9,328,054Imprest Advance for Vehicle Expenses 260,813 20,000Tax Refunds 2,493,152 2,521,226Interest Accrued but not Due 32,090 36,839Advance Income Tax / Tax Deducted at Source 9,176,774 1,721,566Other Advances 3,896,161 614,430Pre-paid Expenses 2,050,386 1,231,924Funds in Transit – 7,263,432


SCHEDULE 12 - CURRENT LIABILITIES AND PROVISIONSSundry Creditors(a) For Goods 169,682,106 185,347,494(b) For Expenses 118,818,385 58,485,856(c) Book Overdrafts – 121,890(d) Advances/Credits from Customers 26,244,657 30,006,360(e) Due to Directors 6,091,503 356,934(f) Interest Accrued but not Due 1,539,559 1,683,487

322,376,209 276,002,021Provisions :For Taxation

Income Tax 54,782,175 13,082,175Fringe Benefit Tax 103,748 7,720,648Wealth Tax 500,000 350,000Diviednd Distribution Tax 3,239,790 –

58,625,713 21,152,823


46


SCHEDULES SCHEDULES SCHEDULES SCHEDULES SCHEDULES ANNEXED ANNEXED ANNEXED ANNEXED ANNEXED TTTTTO O O O O AND FORMING PAND FORMING PAND FORMING PAND FORMING PAND FORMING PARARARARART T T T T OF PROF PROF PROF PROF PROFIT & LOFIT & LOFIT & LOFIT & LOFIT & LOSSOSSOSSOSSOSSACCOUNT FOR THE YEAR ENDEDACCOUNT FOR THE YEAR ENDEDACCOUNT FOR THE YEAR ENDEDACCOUNT FOR THE YEAR ENDEDACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 31ST MARCH, 2010 31ST MARCH, 2010 31ST MARCH, 2010 31ST MARCH, 2010


Rupees Rupees

SCHEDULE 13 - OTHER INCOMEExchange Rate Fluctuation 10,554,580 –Exchange Rate Difference due to Translation 3,222,471 –Interest Income 25,396,181 16,323,093Misc. / Other Income 321,389 15,061

PER PROFIT AND LOSS ACCOUNT 39,494,621 16,338,154

SCHEDULE 14 - INCREASE / (DECREASE) IN STOCKClosing Stock of Finished Goods 301,899,176 134,870,265Add : Closing Stock of Goods–in–Transit 2,826,250 –Less : Opening Stock of Finished Goods 134,870,265 75,811,725


SCHEDULE 15 - CONSUMPTION OF MATERIALS1) Opening Stock of Raw Materials 204,740,918 56,656,168

Add : Purchases 315,926,519 316,733,584520,667,437 373,389,752

Less : Closing Stock of Raw Materials 39,015,091 204,740,918 Raw Material Consumed 481,652,346 168,648,834

2) Opening Stock of Packing Materials 77,261,904 38,775,175Add : Purchases 91,866,139 88,044,624

169,128,043 126,819,799Less : Closing Stock of Packing Materials 79,240,785 77,261,904

Packing Materials Consumed 89,887,258 49,557,8953) Traded / Re–Branded Productsa) Plant Nutrients

Opening Stock 77,147,101 32,188,198Add : Purchases 91,069,728 349,326,539

168,216,829 381,514,737Less : Closing Stock 9,346,249 77,147,101

Plant Micronutrients Traded 158,870,580 304,367,636b) Insecticides



Insecticides Traded 36,603,012 26,225,350c) Equipments

Opening Stock – –Add : Purchases 14,729,195 –

14,729,195 –Less : Closing Stock 1,506,590 –

Equipments Traded 13,222,605 –Traded / Rebranded Products (a+b+c) 208,696,197 330,592,986

Consumption of Materials ( 1 + 2 + 3 ) 780,235,800 548,799,715

47


Rupees Rupees

SCHEDULE 16 - MANUFACTURING EXPENSESConsumables 4,555,534 9,599,812Excise Duty & Education Cess 15,796,378 16,139,565Freight Inward 13,207,463 11,381,766General Expenses – Factory 1,610,024 1,956,504Power & Fuel 5,042,998 5,660,525Processing Charges 7,117,917 6,069,707Rent, Rates & Taxes – Factory & Godown 5,538,888 4,347,737Repairs & Maintenance – Factory 1,310,346 1,766,973Wages 21,926,307 18,773,691


SCHEDULE 17 - PAYMENT TO & FOR EMPLOYEESAllowances 7,143,057 4,352,079Bonus 2,898,050 3,838,906Directors Remuneration 13,570,195 9,763,209Funds/Contribution 12,560,570 10,627,253Perks/Expenses 1,197,974 695,923Salary 76,922,839 59,244,090Staff Welfare Expenses 4,306,346 4,941,510Training & Recruitment Expenses 510,211 744,867

119,109,242 94,207,837

SCHEDULE 18 - ADMINISTRATION, SELLING & OTHER EXPENSESSelling CostsAdvertisement & Publicity 31,844,453 9,871,554Business Promotion Expenses 374,809 –Discount and Rebate 123,967,839 154,010,590Freight & Delivery Expenses 66,659,521 59,270,790Mobile Selling Expenses (KVV) 24,078,321 1,463,329Selling Expenses 5,331,288 3,069,790Travelling expenses 39,110,182 37,241,086

291,366,412 264,927,139

Other Administration ExpensesAuditors Remuneration 1,323,600 1,342,140Conveyance & Motor Car Expenses 12,504,203 11,361,268Electricity 565,469 754,285Exchange Rate Fluctuation – 33,288,304General Expenses – Office 3,072,776 3,130,744Insurance Expenses 2,086,902 1,427,588Legal & Professional Charges 4,515,106 4,824,450Loss on Sale of Fixed Asset 2,042,277 434,407Postage & Telephones 6,742,878 6,298,746Printing & Stationary 9,569,719 10,365,049Rent, Rates & Taxes 3,749,606 4,147,515Repairs and Maintenance – Office 1,663,047 626,124

47,835,583 78,000,620


48


SCHEDULE: 19SCHEDULE: 19SCHEDULE: 19SCHEDULE: 19SCHEDULE: 19NOTES TO ACCOUNTS

1. Significant Accounting Policies

A. Basis of PreparationThe financial statements have been preparedunder the historical cost convention andmaterially comply with the Accounting Standardsissued by the Institute of Chartered Accountantsof India (ICAI) and the provisions of theCompanies Act, 1956. All income andexpenditure having material bearing on thefinancial statements have been recognized onthe accrual basis.

B. Use of EstimatesThe preparation of financial statements inconformity with generally accepted accountingprinciples requires management to makeestimates and assumptions that affect thereported amounts of assets and liabilities andthe disclosure of contingent liabilities on the dateof financial statements. Actual results could differfrom those estimates. Any revision to accountingestimates is recognized prospectively in currentand future periods.

C. Fixed Assets and Depreciation

a) Fixed Assets are stated at cost ofacquisition / construction / revaluationless accumulated depreciation

b) Depreciation on Fixed Assets is providedon straight line method at the rates andin the manner prescribed in Schedule XIVof the Companies Act, 1956.

c) Depreciation on building to the extent ofrevalued amount has been debited toRevaluation Reserve account.

d) On assets acquired during the year andassets sold during the year thedepreciation has been provided pro ratafor the period used.

e) The company had acquired severalvehicles which are yet to be transferred inthe name of the company. The companyhas all the ownership rights and thedepreciation thereon has been charged atthe rates prescribed in Schedule XIV tothe Companies Act, 1956.

D. InvestmentsInvestments being long term are stated at cost.Provision is made to recognize a diminutionother than temporary in the value ofinvestments.

E. Inventorya) Raw material, packing materials, stores,

spares and stock-in-transit valued at cost.

b) Finished goods are valued at cost ormarket value whichever is lower. The costincludes cost of production and expensesincurred in putting the inventories in theirpresent location and condition.

c) Waste and scrap are not separatelyvalued being insignificant in value

F. Revenue Recognitiona) Revenue from sale of goods is

recognized when the goods are handedover to the customer or his dulyauthorized agent

b) Sales are accounted net of sales taxrecovered, sales returns, trade discounts,rebates and allowances but includeduties wherever applicable. (Though,quantity discounts, Incentive discountsare debited to Profit & Loss A/c. directly.)

G. Employee Benefitsa) Bonus is accounted on accrual basis

b) Gratuity is covered under the groupgratuity scheme of life insuranceCorporation of India.

c) All employees are eligible for benefitunder provident fund (PF) scheme.Provident Fund of 12% covers employeesbasic salary plus dearness allowancewherever applicable is deducted and paidalongwith company’s contribution of anequal amount on a monthly basis to thegovernment administered provident fundscheme and charged to profit and lossaccount.

H. Earning Per ShareBasic earning per Share is calculated by dividingthe net profit or loss for the year attributable to EquityShareholders by the weighted average number ofequity shares outstanding during the year.

49

I. Impairment of AssetsThe carrying amount of the Company’s Assetsare reviewed at each balance sheet date ifany indication of any impairment exists, animpairment loss is recognized to the extent ofthe excess of the carrying amount over theestimated accountable amount.

J. Foreign Currency Transactionsa) The transactions in foreign currency are

accounted at the exchange rate i.e.custom rate prevailing on the date oftransaction. Exchange fluctuation betweenthe transaction date and settlement datein respect of transactions are transferredto exchange rate difference account andwritten off to profit & loss account.

b) Current assets and current liabilitiesinvolving transactions in foreign currencyare converted at the exchange ratesprevailing on the date of Balance Sheet.Any profit and loss arising out of suchconversion is charged to profit and lossaccount.

c) Non-monetary items i.e. investments areconverted at the rate prevalent on thedate of transaction.

2. Current Assets, Loans & Advances and Provisionsa) The current assets and loans and advances are

approximately of the value stated, if realized inthe ordinary course of business.

b) The provision for all known liabilities is not inexcess of the amounts reasonably necessary.

c) The balances of Sundry Creditors, SundryDebtors and Loans and Advances are subjectto confirmation.

3. GratuityThe Company has opted for Life insurance corporationof india’s group gratuity scheme for its employees. Thescheme offered by the life insurance corporation ofindia permits the company for payment of arrears infive yearly installments commencing from 1st

December, 2005. The total contribution payableincluding arrears as per life insurance corporation ofindia as on 31/03/2010 is Rs. 25,900,077/-. During theyear the company has paid Rs 3,879,534/- (Previousyear Rs.1,037,662/-) towards gratuity fund. Theunprovided liability as on 31/03/2010 is Rs.Nil(Previous year Rs. 13,211,626/-). The details ofcontribution to gratuity fund are as under:a) Present value of obligations as on 31/03/2010

is Rs. 25,900,077/-.

b) Fair value of plan assets as on 31/03/2010 isRs. 9,850,079/-.

c) Provisions made (fully) as on 31/03/2010 is Rs.16,049,998/-.

4. Leave EncashmentAs per the policy of the company, only managerial staffis entitled to encash their annual leave. The same isaccounted for on cash basis. The liability isunascertainable.

5. Contingent Liability not provided for in theaccounts:a) Letters of credit / guarantee Rs. 634.90 lakhsb) Claims against company not acknowledged as

debts Rs. 51.84 lakhs which includes tax duesdisputed as Rs 10.51 lakhs towards sales Tax,Rs. 14.73 lakhs towards Income Tax andincludes Rs. 25.51 lakhs pertaining to pendingsuits regarding quality issue.

c) The Commissioners of Central Excise, Mumbaiand Hyderabad had issued Show Cause-Cum-Demand Notices for levy of Excise Duty onclearances of Micronutrients amounting toRs.8.02 Crores. The Commissioner of CentralExcise, Mumbai, vide his Order dated 27thNovember, 2006 and Commissioner of CentralExcise, Hyderabad, vide his Order dated 30thNovember 2005 had cancelled these demands.The Department has preferred appeals againstthe said orders. The Department has issuedShow Cause Notices to the Company in respectof clearances thereafter. Though, in view of theOrders referred to above and the pendingappeals, no action has been taken. TheCompany expects no liability in this regard.

d) Estimated amount of Contracts remaining to beexecuted on capital account and not providedfor (Net of Advances) is Rs 420.38 Lakhs.

6. Income TaxThe current charge for income tax is calculated inaccordance with the relevant tax regulations applicableto the Company. Deferred Tax Assets and Liabilitiesare recognized for the future tax consequencesattributable to timing differences that result betweenthe profit offered for Income Tax and profit as perfinancial statements.Deferred Tax assets and liabilities are measured usingtax rates and tax laws that have been enacted orsubstantively enacted on the balance sheet date. Theeffect on deferred tax assets and liabilities of a changein tax rates is recognized in the period that includesthe enactment date.

50

40th Annual Report 2009-2010ASSUMPTION:

All the expenses claimed (but allowable on the condition ofpayment U/s 43B) will be paid on or before “due date”.

8. Earnings per Share

Particulars Year Ended Year Ended31st March 31st March

2010 2009Net Profit after tax as per Profit & Loss 125,603,473 31,076,726Account attributable to EquityShareholdersNet Profit before exceptional items 125,603,473 31,076,726Weighted Average number ofEquity Shares used as denominator 13,004,339 13,004,339for calculating EPSBasic & Diluted Earning per Share (Rs.) 9.66 2.39Basic & Diluted Earning before 9.66 2.39exceptional items per Share (Rs.)Face Value per Equity Share 10 10

9. Segmental Reporting as per AccountingStandard - 17The Company has only One Reportable Segment interms of Accounting Standard 17 issued by ICAI

10. Related Party Disclosure as per Accounting Standard – 18 issued by The Institute of Chartered Accountants of India.

PPPPPARARARARART – T – T – T – T – AAAAADETAILS OF RELATED PARTIES AS PER AS – 18

Nature of Relationship Name of Related Party Remarks

Subsidiary Aries Agro Care Pvt. Ltd. Date of Incorporation 5th January 2007 Aries Agro Equipments Pvt. Ltd. Date of Incorporation 12th January 2007Aries Agro Produce Pvt. Ltd. Date of Incorporation 20th June 2008Golden Harvest Middle East FZC Date of Incorporation 31st October 2004

Enterprises over which the key Aries Marketing Ltd.Management Persons has Blossoms International Ltd.Significant Influence or Control Sreeni Agro Chemicals Pvt.Ltd.

Aries East West Nutrients Pvt.Ltd.

Key Management Personnel Dr. Jimmy Mirchandani Chairman & Managing DirectorDr. Rahul Mirchandani Executive DirectorMr. Akshay Mirchandani Director

7. Deferred Tax: Accounting Standard - 22


2010 20091 As on 1st April, 2009

A Deferred Tax Liability on 4,575,005 NILaccount of depreciation

B Deferred Tax Asset NIL (3,420,991)

4,575,005 (3,420,991)

2 Deferred Tax Liability /(Assets) as on 31st Mar, 2010.A Deferred Tax Liability on 21,690,767 14,785,257

account of depreciationB Deferred Tax Asset on (6,806,835) (10,210,252)

account of issueexpenses w/off

C Deferred Tax Liability /(Asset) 14,883,932 4,575,005

Deferred Tax Liability/(Asset)Debited to Profit & Loss A/c. 10,308,927 7,995,996

51

Relatives of Key Management Name of Key Management Name of Relative RelationshipPersonnel Person

Dr. Jimmy Mirchandani Mrs. Sarasa Mirchandani SpouseMr. Akshay Mirchandani SonMr. Amol Mirchandani SonDr. Rahul Mirchandani Brother

Dr. Rahul Mirchandani Mrs. Nitya Mirchandani SpouseMaster Armaan Mirchandani SonDr. Jimmy Mirchandani Brother

Mr. Akshay Mirchandani Mrs. Aparna Mirchandani SpouseDr. Jimmy Mirchandani FatherMrs. Sarasa Mirchandani MotherMr. Amol Mirchandani Brother

Enterprises in which the key Mirabelle International Prop. Dr. Jimmy MirchandaniManagement Persons havetotal control

PARPARPARPARPART – BT – BT – BT – BT – BDETAILS OF TRANSACTIONS WITH RELATED PARTIES

Sr. Category Nature of Service Year Ended Year EndedNo. 31st March 2010 31st March 2009

1 Subsidiary Finance – Loans/Payments Given 16,392,431 89,882,178Finance – Loans/Payments Received 15,780,623 20,462,771Finance Equity – Share application money paid 80,656,500 75,000Sale of Goods 53,597,213 422,490Purchases made 102,612,951 226,597,305Receipts from sale of goods 5,585,772 –Payments ( Net of receipts ) for goods 127,704,026 219,193,944

2 Enterprise over Finance - Loans/Payment given 5,003,349 105,173which key Sales – 1,661,088management Receipts from sale of goods – 1,765,000personnel hassignificantinfluence orcontrol

3 Key Finance – Unsecured loans received 9,500,000 4,200,000Management Finance – Unsecured loans repaid 11,200,000 2,500,000Personnel Directors remuneration paid 13,367,695 9,515,709

52


PART – CPART – CPART – CPART – CPART – CBALANCE OUTSTANDING WITH RELATED PARTIES.

Nature of out Category Name of the Party Year Ended Year Endedstanding 31st March 2010 31st March 2009Loans and Advances Subsidiary Aries Agro Care Pvt Ltd 12,204,327 11,232,354

Aries Agro Equipments Pvt Ltd 11,338,644 3,520,268Aries Agro Produce Pvt Ltd 129,460 111,485Golden Harvest Middle East FZC 236,051,682 267,847,108

Creditors for Goods Golden Harvest Middle East FZC 14,439,588 35,342,637Share Application Money Golden Harvest Middle East FZC 146,116,500 81,554,945Sundry Debtors Golden Harvest Middle East FZC 42,657,196 –Sundry Debtors Enterprise over Aries Marketing Ltd 16,840,616 11,837,267

which keymanagementpersonnel hassignificant influenceor control

Loans and Advances Aries East West Nutrients Pvt. Ltd. 4,499,536 4,499,536Due to / From Directors Key Management Dr. T. B Mirchandani – 453,425

Dr. Jimmy Mirchandani 3,035,200 722,406Dr. Rahul Mirchandani 3,056,303 334,528

Unsecured Loans Dr. Jimmy Mirchandani – 1,700,000Loans and Advances Enterprises in which Mirabelle International 2,157,138 2,157,138

the key ManagementPersons have totalcontrol

11. Remuneration to DirectorsRemuneration paid to Chairman & Managing Director and Executive Director is within the limits laid down underSchedule XIII to the Companies Act, 1956 and included in the Profit and Loss Account, as Directors Remuneration.Managerial Remuneration u/s. 198 of the Companies Act, 1956

Particulars Year Ended 31st March 2010 Year Ended 31st March 2009

Salaries and Allowances 7,259,895 8,870,176

Contribution to P. F. 607,800 645,533

Commission payable to Directors 5,500,000 –

(Net profit as determined u/s 349 of Companies Act, 1956 is Rs. 1,969.55 Lacs)12. Auditors Remuneration

Particulars Year Ended 31st March 2010 Year Ended 31st March 2009a. Statutory Audit fees 1,147,120 1,118,450b. Tax Audit fees 220,600 223,690c. Taxation Matters 58,708 150,276d. Certification – 11,236

53

13. Foreign Exchange Earnings & Outgo:

Earnings in Foreign Exchange Year Ended 31st March 2010 Year Ended 31st March 2009F.O.B. Value of export sales 41,495,891 2,742,118

Expenditure in Foreign Exchange Year Ended 31st March 2010 Year Ended 31st March 2009CIF value of Imports 218,190,118 427,417,500

Foreign Traveling Expenses 2,966,889 324,327

Remittance towards Share ApplicationMoney to Golden Harvest Middle East FZC 80,656,500 –

OPENING STOCK PRODUCTION Purchase CLOSING STOCK TURNOVER of Traded

GoodsParticulars Quantity Value Quantity Quantity Quantity Value Quantity Value Kgs. Rs. Kgs. Kgs. Kgs. Rs. Kgs. Rs.

14. Outstanding Dues of SSI UnitsThe Company has no information as to whether any of its suppliers constitute small scale/ancillary undertakings andtherefore the claims from suppliers and other related data under the “Interest on Delayed Payments to Small andAncillary unit Act, 1993 “ could not be ascertained.

15. (A) Additional information required under Part II of Schedule VI of the Companies Act, 1956 is as under:

(As certified by the management and relied upon by the Auditor)

Licensed Capacity : Not Applicable

Installed Capacity : 84,600 Metric Tonnes(84,600 Metric Tonnes)

(B) Actual Production : 35,647 Metric Tonnes(16,907 Metric Tonnes)

(C) Quantitative and Turnover information

Agricultural MicroNutrient & SpecialityFertilizersManufactured 1,901,586 130,430,850 35,242,439 - 1,797,824 122,527,006 35,346,201 838,472,107

(1,001,072) (69,642,297) (16,565,888) (1,901,586) (130,430,850) (15,665,374) (640,177,110)Traded/Rebranded 2,028,585 77,147,101 - 5,434,280 2,802,311 177,965,652 4,660,554 331,089,103

(405,419) (32,188,198) - (10,048,881) (2,028,585) (77,147,101) (8,425,715) (338,600,637)Insecticides &PesticidesManufactured 73,364 3,844,813 175,500 - 54,912 12,234,102 193,952 105,247,425

(234,339) (5,258,744) (134,033) - (73,364) (3,844,813) (295,008) (82,891,661)Rebranded 25,278 9,548,748 - 230,522 156,907 34,842,624 98,893 64,074,534

(15,872) (6,410,902) - (79,913) (25,278) (9,548,748) (70,507) (39,440,320)Animal Feed & FeedConcentrates 24,080 594,602 228,837 - 134,718 1,344,915 118,199 2,685,377

(26,197) (910,684) (207,045) - (24,080) (594,602) (209,162) (3,332,154)Others - - - 396,592 49,074 1,506,590 347,518 55,892,727

Total 4,052,893 221,566,114 35,646,776 6,061,394 4,995,746 350,420,889 40,765,317 1,397,461,273 (1,682,899) (114,410,825) (16,906,966) (10,128,793) (4,052,893) (221,566,114) (24,665,766) (1,104,441,882)

(Figures in bracket relate to previous year)

54

40th Annual Report 2009-2010(D) Consumption of Raw Materials

Description Consumption Value (in kgs) in Rs.Inorganic Minerals 33,962,731 316,473,829

(13,340,092) (130,685,921)

Organic Minerals 2,548,090 165,178,518(3,847,750) (37,962,913)

Total 36,510,822 481,652,346(17,187,842) (168,648,834)

(Figures in bracket relate to previous year)

Value of Imported and Indigenous materials consumed during the year.

Particulars Year Ended 31st March 2010 Year Ended 31st March 2009Rs. % Rs. %

a) Imported 175,786,815 36.50 39,632,476 23.50

b) Indigenous 305,865,532 63.50 129,016,358 76.50

Total 481,652,346 100.00 168,648,834 100.00

Value of Imported and Indigenous materials traded during the year

Particulars Year Ended 31st March 2010 Year Ended 31st March 2009Rs. % Rs. %

a) Imported 49,824,506 29.71 337,055,168 89.00

b) Indigenous 117,871,305 70.29 41,634,567 11.00

Total 167,695,811 100.00 378,689,735 100.00

16. Term Loans from HDFC (classified as unsecured) is secured against the personal assets of the directors.

17. Sundry Debtors include due from the Companies under the same management.

Name of the Party Amount Rs.

Golden Harvest Middle East (Balance as on 31/03/2010) 42,657,196

Maximum balance outstanding during the year 42,657,196

18. Loans and Advances include due from the Companies under the same management


1 Aries East West Nutrients Private Limited (Balance as on 31/03/2010) 4,499,536Maximum balance outstanding during the year 4,499,536

2 Aries Marketing Limited (Balance as on 31/03/2010) 16,840,616Maximum balance outstanding during the year 16,840,616

3 Mirabelle International (Balance as on 31/03/2010) 2,157,138Maximum balance outstanding during the year 2,157,138

4 Aries Agro Equipments Pvt Ltd (Balance as on 31/03/2010) 11,338,644Maximum Balance outstanding during the year 11,569,123

55


5 Aries Agro Care Pvt Ltd (Balance as on 31/03/2010) 12,204,327

Maximum Balance outstanding during the year 12,570,858

6 Aries Agro Produce Pvt Ltd (Balance as on 31/03/2010) 129,460

Maximum Balance outstanding during the year 129,460

7 Golden Harvest Middle East (Balance as on 31/03/2010) 236,051,682

Maximum Balance outstanding during the year 267,847,108

19. Loans & Advances includes the Custom Duty Refund awaited Rs. 2,493,152/-.

20. Margin for Bank Guarantees includes Rs. 2.95 Lacs being the amount of Fixed Deposits for issue of Bank Guaranteeson behalf of Subsidiaries / Associates.

21. Previous years figures have been regrouped wherever necessary so as to make them comparable with the currentyear.






56


ADDITIONADDITIONADDITIONADDITIONADDITIONAL INFORMAAL INFORMAAL INFORMAAL INFORMAAL INFORMATION TION TION TION TION AS REQAS REQAS REQAS REQAS REQUIRED UNDER PARUIRED UNDER PARUIRED UNDER PARUIRED UNDER PARUIRED UNDER PART IV OFT IV OFT IV OFT IV OFT IV OFSCHEDULE SCHEDULE SCHEDULE SCHEDULE SCHEDULE VI OF VI OF VI OF VI OF VI OF THE COMPTHE COMPTHE COMPTHE COMPTHE COMPANIES ANIES ANIES ANIES ANIES ACTACTACTACTACT,,,,, 1956 1956 1956 1956 1956I Registration Details

Registration No. : U99999MH1969PLC014465State Code : 11 Balance Sheet Date : 31032010

II Capital Raised during the yearPublic Issue : NIL Rights Issue : NILBonus Issue : NIL Private Placement : NIL

III Position of Mobilation & Deployment of Funds (Rupees in Lacs)Total Liabilities : 23356.89 Total Assets : 23356.89Sources of Funds :Paid-up Capital : 1300.43 Reserves & Surplus : 9343.95Secured Loans : 7847.35 Unsecured Loans : 906.29Net Deferred Tax Liability : 148.84Application of FundsNet Fixed Assets : 3230.57 Capital Work in Progress : 1572.78Investments : 1464.05 Net Current Assets : 13279.48Miscellaneous Expenditure : NIL

IV Performance of the Company ( Rupees in Lacs )Turnover : 16068.11 Total Expenditure : 14173.99Profit Before Tax : 1894.12 Profit After Tax : 1256.03Earnings Per Share (Rs.) : 9.66 Dividend Rate (%) : 15.00

V Generic Names of Principal ProductsItem Code No. (ITC Code) : 310500 Item Code No. (ITC Code) : 380810Product Description Micronutrient Fertilizers Product Description Insecticides & PesticidesItem Code No. (ITC Code) : 230200 Item Code No. (ITC Code) : 2503.0090Product Description Feed Supplements Product Description Other Plant NutrientsItem Code No. (ITC Code) : 2528.9020 Item Code No. (ITC Code) : 2817.0010Product Description Other Plant Nutrients Product Description Other Plant NutrientsItem Code No. (ITC Code) : 2821.5990 Item Code No. (ITC Code) : 2827.3990Product Description Other Plant Nutrients Product Description Other Plant NutrientsItem Code No. (ITC Code) : 2833.2990 Item Code No. (ITC Code) : 2840.1900Product Description Other Plant Nutrients Product Description Other Plant NutrientsItem Code No. (ITC Code) : 084248100Product Description Appliances for

Agricultural or Horticultural Use






57

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i. We have audited the attached Consolidated BalanceSheet of ARIES AGRO LIMITED (The Company)and its subsidiaries, ARIES AGRO CARE PVT. LTD.,ARIES AGRO EQUIPMENTS PVT. LTD., ARIESAGRO PRODUCE PVT. LTD. And GOLDENHARVEST MIDDLE EAST FZC collectively referredto as the “ARIES GROUP” or “The Group” as at 31st

March, 2010 and also the Consolidated Profit & LossAccount and the Consolidated Cash Flow Statementof THE GROUP for the period ended on that dateannexed thereto. These financial statements areresponsibility of the ARIES GROUP management andhave been prepared by the management on the basisof separate financial statements and other financialinformation. Our responsibility is to express an opinionon these financial statements based on our audit.






We believe that our audit provides a reasonable basisfor our opinion.

iii We did not audit the financial statements of thesubsidiary company GOLDEN HARVEST MIDDLEEAST FZC, whose financial statements reflect totalassets of AED 44,963,327 as at 31st March 2010, thetotal revenue of AED 20,141,653 and cash flows

amounting to AED 151,904 for the period then ended.These financial statements and other financialinformation have been audited by other auditors whosereport has been furnished to us, and our opinion isbased solely on the report of other auditors.

iv We report that the consolidated financial statementshave been prepared by the ARIES GROUPmanagement in accordance with the requirement ofAccounting Standards (AS) 21, Consolidated FinancialStatements and Accounting Standards (AS) 23,Accounting For Investments in Associates inConsolidated Financial Statements issued by theInstitute of Chartered Accountants of India.

Based on our audit and on consideration of reports ofother auditors on separate financial statements andon the other financial information, and to the best ofour information and according to the explanationsgiven to us, we are of the opinion that the attachedConsolidated Financial Statements together with notesthereon, give the information required by theCompanies Act, 1956 in the manner so required andgive a true and fair view in conformity with theaccounting principles generally accepted in India.

i. in the case of the Consolidated Balance Sheet,of the state of affairs of the “ARIES GROUP”as at 31st March, 2010, and

ii. in the case of the Consolidated Profit and LossAccount, of the profit for the period ended onthat date.

iii. in the case of the Consolidated Cash FlowStatement, of the cash flows for the periodended on that date.


Kirti D. ShahPlace: Mumbai Proprietor

Date:- 21st July, 2010 Membership No. 32371

AAAAAUDITUDITUDITUDITUDITORS REPORORS REPORORS REPORORS REPORORS REPORT ON CONSOLIDT ON CONSOLIDT ON CONSOLIDT ON CONSOLIDT ON CONSOLIDAAAAATED FINTED FINTED FINTED FINTED FINANCIAL STANCIAL STANCIAL STANCIAL STANCIAL STAAAAATEMENTSTEMENTSTEMENTSTEMENTSTEMENTSTO THE BOARD OF DIRECTORSTO THE BOARD OF DIRECTORSTO THE BOARD OF DIRECTORSTO THE BOARD OF DIRECTORSTO THE BOARD OF DIRECTORSARIES AGRO LIMITEDARIES AGRO LIMITEDARIES AGRO LIMITEDARIES AGRO LIMITEDARIES AGRO LIMITED

59

CONSOLIDCONSOLIDCONSOLIDCONSOLIDCONSOLIDAAAAATED BTED BTED BTED BTED BALANCE SHEET ALANCE SHEET ALANCE SHEET ALANCE SHEET ALANCE SHEET AS AS AS AS AS AAAAAT 31ST MART 31ST MART 31ST MART 31ST MART 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010



I. SOURCES OF FUNDSSHAREHOLDERS’ FUNDS(a) Share Capital 1 130,043,390 130,043,390(b) Reserves and Surplus 2 1,006,029,335 906,477,928

1,136,072,725 1,036,521,306MINORITY INTEREST 3(a) Equity 24,517,061 26,558,861(b) Non - Equity 25,021,774 13,593,132

49,538,835 40,151,993LOAN FUNDS(a) Secured Loans 4 787,093,231 650,414,799(b) Unsecured Loans 5 90,628,878 54,771,446

877,722,109 705,186,245DEFERRED TAX LIABILITY / ( ASSET ) 14,883,932 4,344,054

TOTAL 2,078,217,600 1,786,203,597

II. APPLICATION OF FUNDSFIXED ASSETS(a) Gross Block 6 490,401,757 447,231,098(b) Less :- Depreciation 94,218,318 71,589,460

396,183,439 375,641,638CAPITAL WORK IN PROGRESS 7 157,277,529 192,131,208INVESTMENTS 8 14,708,236 16,635,664CURRENT ASSETS, LOANS & ADVANCES(a) Inventories 9 558,983,802 544,523,138(b) Sundry Debtors 10 662,206,610 561,524,403(c) Cash & Bank Balances 11 71,412,467 15,758,361(d) Loans and Advances 12 589,143,274 398,042,965

1,881,746,154 1,519,848,868Less: CURRENT LIABILITIES AND PROVISIONS(a) Current Liabilities 13 316,376,960 301,959,260(b) Provisions 59,365,713 21,170,223

375,742,673 323,129,483NET CURRENT ASSETS 1,506,003,480 1,196,719,384MISCELLANEOUS EXPENDITURE 14 4,044,916 5,075,702Pre-Operative Expenses (To the extent not written off or adjusted)

TOTAL 2,078,217,600 1,786,203,597

NOTES TO THE ACCOUNTS 21






60


CONSOLIDCONSOLIDCONSOLIDCONSOLIDCONSOLIDAAAAATED TED TED TED TED PRPRPRPRPROFIT & LOFIT & LOFIT & LOFIT & LOFIT & LOSS OSS OSS OSS OSS AAAAACCOUNT FOR CCOUNT FOR CCOUNT FOR CCOUNT FOR CCOUNT FOR THE THE THE THE THE YEARYEARYEARYEARYEAR ENDED 31ST MAR ENDED 31ST MAR ENDED 31ST MAR ENDED 31ST MAR ENDED 31ST MARCH,CH,CH,CH,CH,20102010201020102010



I. INCOME(a) Sales 1,524,400,662 1,130,828,002(b) Other Income 15 30,495,548 9,663,334(c) Increase/(Decrease) in Stock 16 200,395,836 59,370,035

Total Revenue 1,755,292,045 1,199,861,371II. EXPENDITURE

(a) Consumption of Materials 17 854,638,341 522,443,394(b) Manufacturing Expenses 18 88,585,646 84,679,970(c) Interest and Financial Charges 80,134,009 59,042,876(d) Payment to & for Employees 19 122,451,527 97,021,739(e) Administration & Other Expenses 20 346,334,357 347,019,620(f) Amortisations 1,031,276 256,844(g) Depreciation 23,558,987 13,202,814

1,516,734,143 1,123,667,258III. Profit Before Tax ( PBT ) 238,557,903 76,194,113IV. Provision for Taxation

( i ) Income taxCurrent Tax 53,695,000 8,300,000Deferred Tax 10,539,877 7,765,045

( ii ) Fringe Benefit tax – 2,817,400( iii ) Wealth tax 500,000 200,000

64,734,877 19,082,445V. Profit After Tax ( PAT ) 173,823,026 57,111,668

Less :– Share of Profit transferred to Minority Interest 11,458,758 6,637,848VI. Profit After Tax ( After adjustment for Minority Interest ) 162,364,268 50,473,820

Less :– Prior Period Expenses 13,211,626 –Less :– Short Provision for Tax in Earlier Years 982,296 18,280,761

VII. Balance brought forward from Previous Year 295,141,549 262,948,490VIII. Amount available for Appropriations 443,311,895 295,141,549IX. Appropriations

Transfer to General Reserve 15,000,000 –Proposed Dividend 19,506,509 –Tax on Proprosed Dividend 3,239,790 –

X. Balance carried to Balance Sheet 405,565,596 295,141,549

NOTES TO THE ACCOUNTS 21






61

A) Cash Flow from Operating Activities :–Net Profit Before Tax and Extraordinary Items 2,385.58 761.94Adjustments for :–Depreciation 235.59 132.03Proposed Dividend / Dividend Distribution Tax (227.46) –Miscellaneous Expenses Written Off 10.31 –Income Tax & Fringe Benefit Tax paid (541.95) (113.17)Prior Period Taxes (9.82) (182.81)Prior Period Expenses (132.12) –Interest / Dividend being income from Investing Activities (154.17) (38.88)Interest Expense being Cash Flow for Financing Activities 801.34 590.43(Profit)/Loss on sale of Fixed Assets being Cash Flow on a/c of Investing Activities 20.42 4.34Difference due to difference in Rates of Exchange (154.08) 333.06

Cash Flow from Operations before Working Capital Changes 2,233.64 1,486.94(Increase) / Decrease in Inventories (144.61) (3,012.04)(Increase) / Decrease in Trade Receivables (1,006.82) (1,312.81)(Increase) / Decrease in Loans & Advances (1,911.00) (1,032.39)Increase / (Decrease) in Current Liabilities and Provisions 526.13 66.51

Cash Flow from Operating Activities (302.66) (3,803.79)

B) Cash Flow from Investing Activities :–Purchase of Fixed Assets, Capital Work In Progress & Advances on Capital A/c (257.23) (1,667.79)Increase in Investments incl. Share Application Money 19.27 (34.90)Proceeds on Sale of Fixed Assets 18.96 15.09Interest Received 154.17 38.88

Cash Flow from Investing Activities (64.82) (1,648.71)

C) Cash Flow from Financing Activities :–Increase / (Decrease) in Borrowings 1,725.36 4,740.03Interest Paid (801.34) (590.43)

Cash Flow from Financing Activities 924.02 4,149.60

Net Increase / (Decrease) in Cash & Cash Equivalents ( A+B+C ) 556.54 (1,302.90)Cash & Cash Equivalents at the Beginning of the Year 157.58 1,460.48


CONSOLIDCONSOLIDCONSOLIDCONSOLIDCONSOLIDAAAAATED STTED STTED STTED STTED STAAAAATEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLOOOOOWS FOR WS FOR WS FOR WS FOR WS FOR THE THE THE THE THE YEARYEARYEARYEARYEARENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010Particulars Year Ended Year Ended

31 March, 2010 31 March, 2009Rupees Rupees






(Rs. in lakhs)

62


SCHEDULE 1 - SHARE CAPITALAuthorised15,000,000 Equity Shares of Rs. 10/- each (Previous year 15,000,000 150,000,000 150,000,000Equity Shares of Rs. 10/- each)

150,000,000 150,000,000Issued, Subscribed and Paidup13,004,339 Equity Shares of Rs.10/- each. The Capital includes 6,600,700shares of Rs.10/- each issued as Bonus Shares 130,043,390 130,043,390


SCHEDULE 2 - RESERVES AND SURPLUSCAPITAL RESERVE(Created on acquisition of Stake in Golden Harvest middle East FZC ) 565,681 565,681

565,681 565,681FOREIGN CURRENCY TRANSLATION RESERVEExchange Rate Difference on Consolidation (5,224,374) 17,843,833

(5,224,374) 17,843,833GENERAL RESERVEBalance b/f 17,956,310 –Add : Transfer from Profit & Loss A/c 15,000,000 17,956,310

32,956,310 17,956,310SHARE PREMIUMBalance b/f 490,037,050 490,037,050

490,037,050 490,037,050REVALUATION RESERVEBalance b/f 84,933,505 87,737,938Less : Depreciation on Revalued assets 2,804,433 2,804,433

82,129,072 84,933,505PROFIT & LOSS ACCOUNT (as per annexed a/c) 405,565,596 295,141,549

405,565,596 295,141,549PER BALANCE SHEET 1,006,029,335 906,477,928

SCHEDULES SCHEDULES SCHEDULES SCHEDULES SCHEDULES ANNEXED ANNEXED ANNEXED ANNEXED ANNEXED TTTTTO O O O O AND FORMING PAND FORMING PAND FORMING PAND FORMING PAND FORMING PARARARARART OF CONSOLIDT OF CONSOLIDT OF CONSOLIDT OF CONSOLIDT OF CONSOLIDAAAAATEDTEDTEDTEDTEDBALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET BALANCE SHEET AS AS AS AS AS AAAAAT 31ST MART 31ST MART 31ST MART 31ST MART 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010Particulars As at As at

31 March, 2010 31 March, 2009Rupees Rupees

SCHEDULE 3 - MINORITY INTERESTMinority Interest - Originala) Minority Interest in Equity

375 shares of AED 100 each held by Minority Interest and current 24,517,061 26,558,861account of Shareholders

24,517,061 26,558,861b) Minority Interest in Non-EquityBalance b/f 13,593,132 6,900,117Add/(Less) :- Translation difference (30,116) 55,167PROFIT & LOSS ACCOUNT (as per annexed a/c) 11,458,758 6,637,848

25,021,774 13,593,132


63

SCHEDULE 4 - SECURED LOANSTerm LoansFROM BANKS 29,193,633 48,823,904(Against charge created on Company’s Asset i.e.Motor vehicles)Repayable within one year Rs. 15,304,279/-( Previous year Rs. 32,741,821/- )FROM BANKS - ICICI BANK BAHRAIN 239,005,728 271,186,230(Foreign Currency Loan - Secured against Equitable Mortgage ofLand and Building and personal guarantee of Directors)Repayable within one year Rs. 9,589,736/-( Previous year Rs. 834,416/- )FROM COMPANY 295,152 –(Against charge created on Company’s Asset i.e.Motor vehicles)Repayable within one year Rs. 53,715/-(Previous year Rs. NIL)Cash Credit/Overdraft/Working Capital Demand Loan (WCDL)/Buyers CreditFROM BANKSHDFC BANK - BUYERS CREDIT 30,290,823 33,522,108(Against charge created on Company’s Inventory, Book Debts andPlant & Machinery and guaranteed by Directors)ICICI BANK - BUYERS CREDIT 38,281,591 42,858,099(Against charge created on Company’s Inventory, Book Debts andPlant & Machinery and guaranteed by Directors)INDIAN OVERSEAS BANK - CASH CREDIT – 81,333,162(Against charge created on Company’s Inventory, Book Debts andPlant & Machinery and guaranteed by Directors)HDFC BANK - WCDL 100,000,000 86,329,105(Against charge created on Company’s Inventory, Book Debts andPlant & Machinery and guaranteed by Directors)ICICI BANK - CASH CREDIT 119,635,438 86,362,191(Against charge created on Company’s Inventory, Book Debts andPlant & Machinery and guaranteed by Directors)CANARA BANK - CASH CREDIT 135,394,748 –(Against charge created on Company’s Inventory, Book Debts andPlant & Machinery and guaranteed by Directors)YES BANK - WCDL / BILL DISCOUNTING 94,996,118 –(Against charge to be created on Company’s Inventory, Book Debts andPlant & Machinery and guaranteed by Directors)



Rupees Rupees

SCHEDULE 5 - UNSECURED LOANS(i) FROM BANKS

HDFC BANK ( Guaranteed by Directors ) 45,329,747 30,555,671Secured by their personal AssetsRepayable within one year Rs. 11,635,902/-(Previous year Rs. 3,254,319/-)

(ii) FROM SHARE HOLDERS - 381,000Interest Accrued & Due on Above - 4,758

(iii) LOAN FROM DIRECTORS - 1,700,000(iv) SECURITY DEPOSIT - TRADE 45,299,131 22,130,017


64


SCHEDULE 6 - FIXED ASSETSGross block 490,401,757 447,231,098Less: Depreciation 94,218,318 71,589,460(As per Separate Statement attached)


SCHEDULE 7 - CAPITAL WORK IN PROGRESS 157,277,529 192,131,208


SCHEDULE 8 - INVESTMENTSA. Invetments in Government or Trust SecuritiesNational Saving Certificates 13,000 13,000(Deposited with BMC for plot at Deonar, Mumbai and for S.S.I.Registration deposited with Industrial Department, Hyderabad)B. Unquoted Invetments at CostTRADEInvestment in Subsidiariesa) In Shares of Mapco Fertilizers FZC25 Equity Shares of AED 48000/- each 14,695,236 16,622,664


SCHEDULE 9 - INVENTORIES(At lower of cost or Net Realisable Value)Certified and valued by the Management)Finished / Traded Goods 379,498,107 236,852,403Finished / Traded Goods-in-Transit 2,826,250 -Raw Materials 93,493,380 226,425,529Packing Materials 83,166,065 81,011,034Raw Materials Goods-in-Transit - 234,172


SCHEDULE 10 - SUNDRY DEBTORSUnsecured - Considered GoodOutstanding for a period exceeding six months 268,987,349 247,610,597Others 393,219,261 313,913,806



Rupees Rupees

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66

40th Annual Report 2009-2010SCHEDULE 11 - CASH AND BANK BALANCESCash on hand 54,599 56,417With Scheduled Banks on Current Account 71,357,868 15,701,944


SCHEDULE 12 - LOANS & ADVANCESUnsecured - Considered GoodLoans & AdvancesAdvances recoverable in cash or in kind or for value to be received- to Companies under same management in which Directors are interested 202,256,056 227,883,774- Margins for Letter of Credit 9,290,616 5,241,655- Margins for Bank Guarantees 2,034,625 2,606,312- Advances to Suppliers 160,938,659 130,773,033- Advances to Saff Against Expenses 3,937,911 5,364,973- Amount recoverable from Directors - 453,425- Advance Rent 37,375 -- Fixed Deposits with Banks 20,000 -Staff Loans 841,675 1,488,713Sundry Deposits 5,806,420 10,033,417Imprest Advance for Vehicle Expenses 260,813 20,000Share Application Money (Amarak Chemicals FZC) 185,380,243 -Tax Refunds 2,494,502 2,521,226Interest Accrued but not Due 32,786 36,839Advance Income Tax / Tax Deducted at Source 9,176,774 1,721,566Other Advances 3,494,736 -Pre-paid Expenses 3,095,082 2,634,600Funds In Transit - 7,263,432MAT Credit Entitlement 45,000 -


SCHEDULE 13 - CURRENT LIABILITIES AND PROVISIONSSundry Creditors(a) For Goods 159,467,507 206,595,064(b) For Expenses 121,608,531 62,201,287(c) Book Overdrafts - 121,890(d) Advances from Customers 27,669,861 31,000,599(e) Due to Directors 6,091,503 356,934(f) Interest Accrued but not Due 1,539,558 1,683,487

316,376,960 301,959,260Provisions :

For TaxationIncome Tax 55,522,175 13,082,175Fringe Benefit Tax 103,748 7,720,648Wealth Tax 500,000 367,400Dividend Distribution Tax 3,239,790 –

59,365,713 21,170,223


SCHEDULE 14 - MISCELLANEOUS EXPENDITURE(To the extent not written off or adjusted)Pre-Operative ExpensesBalance B/f 5,075,702 4,411,812Add :- Additions during the Year 25,490 920,734

5,101,192 5,332,546Less : Sales Tax Deposit transferred 25,000 -Less :- 1/5 th Written Off to Profit & Loss Account 1,031,276 256,844


67

SCHEDULES SCHEDULES SCHEDULES SCHEDULES SCHEDULES ANNEXED ANNEXED ANNEXED ANNEXED ANNEXED TTTTTO O O O O AND FORMING PAND FORMING PAND FORMING PAND FORMING PAND FORMING PARARARARART OF CONSOLIDT OF CONSOLIDT OF CONSOLIDT OF CONSOLIDT OF CONSOLIDAAAAATEDTEDTEDTEDTEDPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNTPROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010 FOR THE YEAR ENDED 31ST MARCH, 2010 FOR THE YEAR ENDED 31ST MARCH, 2010 FOR THE YEAR ENDED 31ST MARCH, 2010 FOR THE YEAR ENDED 31ST MARCH, 2010


Rupees Rupees

SCHEDULE 15 - OTHER INCOMECommission on Sales 980,306 1,041,445Contract Penalty - 2,686,780Exchange Rate Fluctuation 10,554,580 -Exchange Rate Difference due to Translation 3,222,471 1,543,495Interest Income 15,416,802 3,888,460Misc. / Other Income 321,389 503,153


SCHEDULE 16 - INCREASE / (DECREASE) IN STOCKClosing Stock of Finished Goods 332,751,346 135,181,760Add : Closing Stock of Goods-in-Transit 2,826,250 -Less : Opening Stock of Finished Goods 135,181,760 75,811,725


SCHEDULE 17 - MATERIALS CONSUMED1) Opening Stock of Raw Materials 225,168,149 63,296,747

Add : Raw Materials Goods in Transit 220,593 26,836,691Add : Purchases 282,750,718 351,298,666

508,139,461 441,432,104Less : Closing Stock of Raw Materials 97,065,512 226,425,529

411,073,949 215,006,574Less: Raw Materials Goods-in-Transit - 234,172

Raw Material Consumed 411,073,949 214,772,403

2) Opening Stock of Packing Materials 81,004,589 38,775,175Add : Purchases 92,384,671 91,934,206

173,389,260 130,709,381Less : Closing Stock of Packing Materials 83,183,540 81,011,034

Packing Material Consumed 90,205,719 49,698,347

3) Traded / Re-Branded Productsa) Plant Nutrients



Plant Micronutrients Traded 294,876,928 231,016,881

68



Rupees Rupees

b) InsecticidesOpening Stock 9,548,748 6,410,902Add : Purchases 61,896,888 29,363,196


Insecticides Traded 36,603,012 26,225,350

c) EquipmentsOpening Stock - -Add : Purchases 14,508,892 -

14,508,892 -Less : Closing Stock 3,976,278 -

Equipments Traded 10,532,614 -

d) SeedsOpening Stock - -Opening Stock - Goods-in-Transit 5,500,000 -Add : Purchases 5,846,120 6,230,414

11,346,120 6,230,414Less : Closing Stock - Goods-in-Transit - 5,500,000

Seeds Traded 11,346,120 730,414

Traded / Rebranded Products (a+b+c+d) 353,358,673 257,972,645

Consumption of Materials (1+2+3) 854,638,341 522,443,394

SCHEDULE 18 - MANUFACTURING EXPENSESConsumables 4,555,534 9,599,812Excise Duty / Education Cess 15,796,378 16,139,565Freight Inward 16,226,908 12,290,058General Expenses - Factory 1,639,841 2,069,336Power & Fuel 8,312,986 7,690,484Processing Charges 7,516,391 6,069,707Rent Factory & Godown 8,087,043 7,814,547Repairs - Factory 1,654,301 1,888,230Wages 24,796,264 21,118,231


69

SCHEDULE 19 - PAYMENT TO & FOR EMPLOYEESAllowances 7,984,065 4,991,875Bonus 2,898,050 3,842,406Directors Remuneration 13,570,195 9,763,209Funds/Contribution 12,601,919 10,818,822Perks/Expenses 1,274,379 847,634Salary 78,844,946 60,713,192Staff Welfare Expenses 4,767,762 5,299,734Training & Recruitment Expenses 510,211 744,867


SCHEDULE 20 - ADMINISTRATION, SELLING & OTHER EXPENSESSelling CostsAdvertisement & Publicity 31,877,308 9,212,093Business Promotion Expenses 374,809 -Discount and Selling Expenses 124,698,841 154,073,002Freight & Delivery Expenses 67,239,813 60,754,860Mobile Selling Expenses (KVV) 24,078,321 -Selling Expenses 5,389,436 3,772,820Travelling Expenses 39,202,345 37,475,979

292,860,872 265,288,754

Other Administration ExpensesAuditors Remuneration 1,550,406 1,432,142Conveyance & Motor Car Expenses 13,283,353 11,911,692Electricity 633,493 831,355Exchange Rate Fluctuation - 33,288,304General Expenses - Office 4,810,607 4,263,720Insurance Charges 2,131,399 1,504,436Legal & Professional Charges 4,586,997 5,121,498Loss on Sale of Fixed Asset 2,042,277 434,407Postage & Telephones 7,447,493 7,018,569Printing & Stationary 9,748,817 10,466,006Rent, Rates & Taxes 5,303,994 4,760,471Repairs and Maintenance - Office 1,921,600 698,266Write Offs 13,049 -

53,473,485 81,730,866



Rupees Rupees

70

40th Annual Report 2009-2010SCHEDULE: 21

NOTES TO ACCOUNTS


A. Basis of Preparation of consolidated financial statementsThe consolidated financial statements have been prepared and presented under the historical cost conventionand materially comply with the Accounting Standards issued by the Institute of Chartered Accountants of India(ICAI) and the provisions of the Companies Act, 1956. All income and expenditure having material bearing onthe consolidated financial statements have been recognized on the accrual basis.

B. Principles of consolidationThe consolidated financial statements include the financial statements of ARIES AGRO LTD. (The Company),the parent company and four of its subsidiaries (collectively referred to as “ARIES GROUP” or “The Group”).

The consolidated financial statements have been prepared on the basis of AS 21 – Consolidated FinancialStatements, AS 23 – Accounting for Investments in Associates in Consolidated Financial Statements, issued byICAI.

SubsidiariesThe financial statements of the parent company and its subsidiaries have been combined on a line -by- linebasis by adding together the book values of like items of assets, liabilities, income and expenses after eliminatingintra group balances/transactions and resulting unrealized profits, if any, in full.

Consolidated financial statements have been prepared using uniform accounting policies for transactions andother events in similar circumstances except where it is not practicable to do so and in case of the Investmentand Fixed assets by foreign subsidiary have been consolidated after translating the same at closing rate as perprovisions of Accounting Standard (AS) - 11 relating to “The Effects of Changes in Foreign Exchange Rates”issued by Institute of Chartered Accountants of India.

The consolidated financial statements are presented, to the extent possible, in the same format as that adoptedby the parent company for its independent financial statements.

C. Use of Estimates

The preparation of consolidated financial statements is in conformity with generally accepted accounting principleswhich require the management to make estimates and assumptions that affect the reported amounts of assetsand liabilities and the disclosure of contingent liabilities on the date of financial statements. Actual results coulddiffer from those estimates. Any revision to accounting estimates is recognized prospectively in current andfuture periods.

D. Fixed Assets and Depreciation

a) Fixed Assets are stated at cost of acquisition / construction / revaluation less accumulated depreciation

b) Depreciation on fixed assets for Indian operations is provided on straight line method at the rates and inthe manner prescribed in Schedule XIV of the Companies Act, 1956.

c) Depreciation for Indian operations on building to the extent of revalued amount has been debited toRevaluation Reserve account.

d) On assets acquired during the year and assets sold during the year the depreciation has been providedpro rata for the period used.

71

e) The cost of property, plant & equipment for subsidiary “Golden Harvest Middle East FZC” is depreciatedby equal annual installments over the estimated useful lives of the Assets. The estimated useful lives ofthe assets for the calculation of depreciation are as follows:

Name of the Asset Years

Building 20

Machineries 10

Equipments 5

Office Furniture 5

Motor Vehicles 5

E. Investments

Investments are stated at cost.

F. Inventoriesa) Raw Material, Packing Material, Stores, Spares and Stock-in-Transit valued at cost.

b) Finished Goods are valued at cost or market value whichever is lower. The cost includes cost ofproduction and expenses incurred in putting the inventories in their present location and condition.

c) Waste and scrap are not separately valued being insignificant in value

G. Revenue Recognitiona) Revenue from sale of goods is recognized when the goods are handed over to the customer or his duly

authorized agent

b) Sales are accounted net of sales tax recovered, sales returns, trade discounts, rebates and allowancesbut include duties wherever applicable. (Though, quantity discounts, incentive discounts are debited toProfit & Loss A/c. directly.)

H. Employee Benefitsa) Bonus is accounted on accrual basis

b) Gratuity is covered under the Group Gratuity scheme of Life insurance Corporation of India.

c) All employees are eligible for benefit under provident fund (PF) scheme. Provident Fund of 12% coveredemployees basic salary plus dearness allowance wherever applicable is deducted and paid alongwithcompany’s contribution of an equal amount on a monthly basis to the government administered providentfund scheme and charged to profit and loss account.

I. Earning Per ShareBasic earning per Share is calculated by dividing the net profit or loss for the year attributable to EquityShareholders by the weighted average number of equity shares outstanding during the year.

J. Impairment of Assets

The carrying amount of the Company’s Assets are reviewed at each balance sheet date if any indication ofany impairment exists, an impairment loss is recognized to the extent of the excess of the carrying amountover the estimated accountable amount.

K. Foreign Currency Transactions

a) The transactions in foreign currency are accounted at the exchange rate i.e. custom rate prevailing onthe date of transaction. Exchange fluctuation between the transaction date and settlement date inrespect of transactions are transferred to exchange rate difference account and written off to Profit &Loss Account.

72


b) Current assets and Current liabilities involving transactions in foreign currency are converted at theexchange rates prevailing on the date of balance sheet. Any profit and loss arising out of such conversionis charged to profit and loss account.

c) For the purpose of consolidation the company has provided interest accrued but not due on the loangiven to its Subsidiary amounting to Rs. 1,097,820/- however the said subsidiary namely Golden HarvestMiddle East FZC has provided only to the tune of Rs. 401,425/- in their books of accounts.

L. Description of the group

The group’s subsidiaries are set as below:

ENTITY % HOLDING Country

Aries Agro Care Pvt. Ltd. 100% India

Aries Agro Equipments Pvt. Ltd. 100% India

Aries Agro Produce Pvt. Ltd. 75% India

Golden Harvest Middle East FZC The Company having remitted contribution UAEof 112,500 AED towards Equity they havebeen classified under Equity and the balance12,171,750 AED is presently categorizedunder Shareholders Current Account.

2. Current Assets, Loans & Advances and Provisionsa) The current assets and loans and advances are approximately of the value stated, if realized in the ordinary

course of business.

b) The provision for all known liabilities is not in excess of the amounts reasonably necessary.

c) The balances of sundry creditors, sundry debtors and loans and advances are subject to confirmation.

3. Gratuity

Indian Operations:The company has opted for Life Insurance Corporation of India’s Group Gratuity Scheme for its employees. Thescheme offered by the Life Insurance Corporation of India permits the Company for payment of arrears in five yearlyinstallments commencing from 1st December, 2005. The total contribution payable including arrears as per Life InsuranceCorporation of India as on 31/03/2010 is Rs. 25,900,077/-. During the year the Company has paid Rs 3,879,534/-(Previous year Rs.1, 037,662/-) towards Gratuity fund. The unprovided liability as on 31/03/2010 is Rs.NIL (Previousyear Rs. 13,211,626/-). The details of Contribution to Gratuity Fund are as under:

a) Present value of obligations as on 31/03/2010 is Rs. 25,900,077/-.

b) Fair value of plan assets as on 31/03/2010 is Rs. 9,850,079/-.

c) Provisions made (fully) as on 31/03/2010 is Rs. 16,049,998/-.

UAE Operations:The liability to employees is fully provided for in the accounts.

4. Leave encashmentAs per the policy of the Company, only Managerial staff is entitled to encash their annual leave. The same isaccounted for on cash basis. The liability is unascertainable.

73

5. Contingent liability not provided for in the accounts:a) Letters of credit / guarantee Rs. 634.90 lakhsb) Claims against company not acknowledged as debts Rs. 51.84 lakhs which includes tax dues disputed as Rs

10.51 lakhs towards Sales Tax, Rs. 14.73 lakhs towards Income Tax and includes Rs. 25.51 lakhs pertainingto pending suits regarding quality issue.

c) The Commissioners of Central Excise, Mumbai and Hyderabad had issued Show Cause-Cum-Demand Noticesfor levy of Excise Duty on clearances of Micronutrients amounting to Rs.8.02 Crores. The Commissioner ofCentral Excise, Mumbai, vide his Order dated 27th November, 2006 and Commissioner of Central Excise,Hyderabad, vide his Order dated 30th November 2005 had cancelled these demands. The Department haspreferred appeals against the said orders. The Department has issued Show Cause Notices to the Companyin respect of clearances thereafter. Though, in view of the Orders referred to above and the pending appeals,no action has been taken. The Company expects no liability in this regard.

d) Estimated amount of Contracts remaining to be executed on capital account and not provided for (Net ofAdvances) is Rs 420.38 Lakhs.

6. Income taxThe current charge for income tax is calculated in accordance with the relevant tax regulations applicable to thecompany. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timingdifferences that result between the profit offered for income tax and profit as per financial statements.Deferred tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantivelyenacted on the balance sheet date. The effect on deferred tax assets and liabilities of a change in tax rates isrecognized in the period that includes the enactment date.

7. Deferred Tax: Accounting Standard - 22Sr Particulars Current Year Ended Year EndedN o 31st March,2010 31st March,2009

1 Opening Deferred Tax Liability as on 1st April, 2009a. Deferred tax liability on account of depreciation 4,344,054 NILb. Deferred tax asset NIL (3,420,991)

Total (a) 4,344,054 (3,420,991)2 Deferred Tax Liability / (Assets) as on 31st Mar, 2010

a. Deferred tax liability on account of depreciation 21,690,767 14,785,257b. Deferred tax asset on account of issue expenses w/off (6,806,835) (10,210,252)c. Deferred tax asset on a/c of b/f losses NIL (230,951)d. Deferred tax liability / (assets) Total (b) 14,883,932 4,344,054Deferred tax liability / (asset) debited to profit & loss a/c Total (c) = (b–a) 10,539,877 7,765,045

Assumption:All the expenses claimed (but allowable on the condition of payment U/s 43B) will be paid on or before “due date”.

8. Earnings per ShareParticulars Year Ended Year Ended

31st March 2010 31st March 2009Net Profit after tax as per Profit & Loss Account attributable to Equity Shareholders 162,364,268 50,473,820Net Profit before exceptional items 162,364,268 50,473,820Weighted Average number of Equity Shares used as denominator for calculating EPS 13,004,339 13,004,339Basic & Diluted Earning per Share (Rs.) 12.49 3.88Basic & Diluted Earning per share (Rs.) before exceptional items 12.49 3.88Face Value per Equity Share 10 10

74

40th Annual Report 2009-20109. Segmental Reporting as per Accounting Standard - 17

The company has only one reportable segment in terms of Accounting Standard – 17 issued by ICAI.10. Related Party disclosure as per Accounting Standard – 18 issued by The Institute of Chartered Accountants of India.

PPPPPARARARARART – T – T – T – T – AAAAADETAILS OF RELATED PARTIES AS PER AS – 18


Enterprises over which the key Aries Marketing Ltd.Management Persons has Blossoms International Ltd.Significant Influence or Control Sreeni Agro Chemicals Pvt.Ltd.

Aries East West Nutrients Pvt.Ltd.

Key Management Personnel Dr. Jimmy Mirchandani Chairman & Managing DirectorDr. Rahul Mirchandani Executive DirectorMr. Akshay Mirchandani Director

Relatives of Key Management Name of Key Management Name of Relative RelationshipPersonnel Person

Dr. Jimmy Mirchandani Mrs. Sarasa Mirchandani SpouseMr. Akshay Mirchandani SonMr. Amol Mirchandani SonDr. Rahul Mirchandani Brother

Dr. Rahul Mirchandani Mrs. Nitya Mirchandani SpouseMaster Armaan Mirchandani SonDr. Jimmy Mirchandani Brother

Mr. Akshay Mirchandani Mrs. Aparna Mirchandani SpouseDr. Jimmy Mirchandani FatherMrs. Sarasa Mirchandani MotherMr. Amol Mirchandani Brother


PART – B PART – B PART – B PART – B PART – BDETAILS OF TRANSACTIONS WITH RELATED PARTIES


1 Enterprise over Finance - Loans/Payment given 5,003,349 105,173which key Sales – 1,661,088management Receipts from sale of goods – 1,765,000personnel hassignificantinfluence orcontrol

2 Key Finance – Unsecured Loans received 9,500,000 4,200,000Management Finance – Unsecured Loans repaid 11,200,000 2,500,000Personnel Directors Remuneration paid 13,367,695 9,515,709

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Nature of out Category Name of the Party Year Ended Year Endedstanding 31st March 2010 31st March 2009Sundry Debtors Enterprises over Aries Marketing Ltd 16,840,616 11,837,267

which keymanagementpersonnel hassignificant influenceor control

Loans and Advances Aries East West Nutrients Pvt Ltd 4,499,536 4,499,536Due to / From Directors Key Management Dr. T. B Mirchandani – (453,425)

Personnel Dr. Jimmy Mirchandani 3,035,200 722,406Dr. Rahul Mirchandani 3,056,303 334,528

Unsecured Loans Dr. Jimmy Mirchandani – 1,700,000Loans and Advances Enterprises in which Mirabelle International 2,157,138 2,157,138

the key ManagementPersons have totalcontrol

11. Remuneration to DirectorsRemuneration paid to Chairman & Managing Director and Executive Director is within the limits laid down underSchedule XIII to the Companies Act, 1956 and included in the Profit and Loss Account, as Directors Remuneration.

Managerial Remuneration u/s. 198 of the Companies Act, 1956

Particulars Year Ended 31st March 2010 Year Ended 31st March 2009Salaries and Allowances 7,259,895 8,870,176Contribution to P. F. 607,800 645,533Commission payable to Directors 5,500,000 -

(Net profit as determined u/s 349 of Companies Act, 1956 is Rs. 1,969.55 Lacs)

12. Auditors RemunerationParticulars Year Ended 31st March 2010 Year Ended 31st March 2009

a. Statutory audit fees 1,329,806 1,186,392b. Tax audit fees 220,600 223,690c. Taxation matters 58,708 150,276

d. Certification - 11,236

13. Outstanding Dues of SSI UnitsThe Company has no information as to whether any of its suppliers constitute small scale/ancillary undertakings andtherefore the claims from suppliers and other related data under the “Interest on Delayed Payments to Small andAncillary unit Act, 1993 “ could not be ascertained.

14. Term Loans from HDFC (classified as unsecured) is secured against the personal assets of the directors.

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15. Loans and Advances include due from the Companies under the same management


1 Aries East West Nutrients Private Limited (Balance as on 31/03/2010) 4,499,536


2 Aries Marketing Limited (Balance as on 31/03/2010) 16,840,616


3 Mirabelle International (Balance as on 31/03/2010) 2,157,138


16. Loans & Advances includes the Custom Duty Refund awaited Rs. 2,493,152/-.

17. Margin for Bank Guarantees includes Rs. 2.95 Lacs being the amount of Fixed Deposits for issue of Bank Guaranteeson behalf of Subsidiaries / Associates.







AUDITOR’S REPORTAUDITOR’S REPORTAUDITOR’S REPORTAUDITOR’S REPORTAUDITOR’S REPORTINDEPENDENT AUDITORS REPORT TO THESHAREHOLDERS

We have audited the accompanying financial statements ofGolden Harvest Middle East (FZC), (“the Company”)Sharjah Airport International Free Zone, Sharjah, United ArabEmirates which comprise the balance sheet as at 31 March2010, the income statement, statement of changes inshareholder’s funds and cash flow statement for the yearthen ended, and a summary of significant accounting policiesand other explanatory notes.

MANAGEMENT’S RESPONSIBILITY FOR THEFINANCIAL STATEMENTS

Management is responsible for the preparation and fairpresentation of these financial statements in accordance withInternational Financial Reporting Standards. Thisresponsibility includes designing, implementing andmaintaining internal control relevant to the preparation andfair presentation of financial statements that are free frommaterial misstatement, whether due to fraud or error; selectingand applying appropriate accounting policies and makingaccounting estimates that are reasonable in thecircumstances.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these financialstatements based on our audit. We conducted our audit inaccordance with International Standards of Auditing. Thosestandards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonableassurance whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the financialstatements. The procedures selected depend on theauditor’s judgement, including the assessment of the risksof material misstatement of the financial statements, whetherdue to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the entity’spreparation and fair presentation of the financial statementsin order to design audit procedures that are appropriate inthe circumstances, but not for the purpose of expressingan opinion on the effectiveness of the entity’s internalcontrol.

An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness ofaccounting estimates made by management, as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our auditopinion.

OPINION

In our opinion, the financial statements present fairly, in allmaterial respects the financial position of Golden HarvestMiddle East (FZC), Sharjah Airport International Free Zone,Sharjah, United Arab Emirates as of 31 March 2010, and ofits financial performance and its cash flows for the year thenended in accordance with International Financial ReportingStandards.

FRG CHARTERED ACCOUNTANTS

Place : Dubai Habib Darwish Al RahmaDate : May 15, 2010 Registration No. 342

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Golden Harvest Middle East FZC

BBBBBALANCE SHEET ALANCE SHEET ALANCE SHEET ALANCE SHEET ALANCE SHEET AAAAAT 31ST MART 31ST MART 31ST MART 31ST MART 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010

PARTICULARS Notes 2010 2009AED AED

ASSETSNon-current assetsProperty, plant and equipment 3 5,971,439 6,132,421Investment in associates 4 1,200,000 1,200,000

7,171,439 7,332,421Current assetsInventories 5 6,236,842 2,274,345Accounts receivable 6 150,000 4,036,325Prepayments and other receivables 7 162,598 185,999Amounts due from related parties 8 31,090,544 19,453,238Cash and bank balances 9 151,904 846,119

37,791,888 26,796,026

TOTAL ASSETS 44,963,327 34,128,447

LIABILITIESShareholders’ FundsShare capital 10 150,000 150,000Shareholders’ current accounts 11 14,134,250 5,701,739Retained earnings 7,362,717 3,894,543Reserve fund 12 75,000 75,000

21,721,967 9,821,282

Non Current liabilitiesProvision for employees’ terminal benefits 13 39,307 24,597Term loans - non current portion 14 116,092 2,873

155,399 27,470

Current liabilitiesAccounts payable and accruals 15 217,576 4,674,906Amounts due to related parties 8 22,791,901 19,587,725Term loans - current portion 14 76,484 17,064

23,085,961 24,279,695

TOTAL LIABILITIES 44,963,327 34,128,447

The notes on pages 7 to 22 form part of these financial statements.For Golden Harvest Middle East (FZC)

Place: Sharjah DirectorDate : 15th May, 2010

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STSTSTSTSTAAAAATEMENT OF INCOME FOR TEMENT OF INCOME FOR TEMENT OF INCOME FOR TEMENT OF INCOME FOR TEMENT OF INCOME FOR THE THE THE THE THE YEAR ENDED 31ST MARYEAR ENDED 31ST MARYEAR ENDED 31ST MARYEAR ENDED 31ST MARYEAR ENDED 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010

PARTICULARS Notes 2010 2009AED AED

INCOMESales 16 20,066,528 20,409,669

Cost of sales 17 (14,986,198) (17,153,274)

GROSS PROFIT 5,080,330 3,256,395

Other income 18 75,125 350,441

TOTAL INCOME 5,155,455 3,606,836

EXPENSESAdministration, selling and general expenses 19 793,750 844,955

Finance charges 22 312,997 1,038,898

Depreciation 3 580,534 283,273

1,687,281 2,167,126

Net profit for the year 3,468,174 1,439,710

The notes on pages 7 to 22 form part of these financial statements.

STSTSTSTSTAAAAATEMENT OF CHANGES IN SHAREHOLDERS’TEMENT OF CHANGES IN SHAREHOLDERS’TEMENT OF CHANGES IN SHAREHOLDERS’TEMENT OF CHANGES IN SHAREHOLDERS’TEMENT OF CHANGES IN SHAREHOLDERS’ FUNDS FOR FUNDS FOR FUNDS FOR FUNDS FOR FUNDS FOR THE THE THE THE THE YEARYEARYEARYEARYEARENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010ENDED 31ST MARCH, 2010Year to 31st March, 2010 Share Shareholders’ Retained Reserve Total

capital current earnings fund accounts

AED AED AED AED AED

Balance at 1st April, 2009 150,000 5,701,739 3,894,543 75,000 9,821,282

Net profit for the year - - 3,468,174 - 3,468,174

Net movements in current accounts - 8,432,511 - - 8,432,511

Balance at 31st March, 2010 150,000 14,134,250 7,362,717 75,000 21,721,967

Balance at 1st April, 2008 150,000 787,539 2,454,833 75,000 3,467,372

Net profit for the year - - 1,439,710 - 1,439,710

Net movements in current accounts - 4,914,200 - - 4,914,200

Balance at 31st March, 2009 150,000 5,701,739 3,894,543 75,000 9,821,282


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CASH FLCASH FLCASH FLCASH FLCASH FLOOOOOW STW STW STW STW STAAAAATEMENT FOR TEMENT FOR TEMENT FOR TEMENT FOR TEMENT FOR THE THE THE THE THE YEAR ENDED 31 MARYEAR ENDED 31 MARYEAR ENDED 31 MARYEAR ENDED 31 MARYEAR ENDED 31 MARCH 2010CH 2010CH 2010CH 2010CH 2010

Particulars 2010 2009AED AED

CASH FLOWS FROM OPERATING ACTIVITIESNet profit for the year 3,468,174 1,439,710Adjustment for:Depreciation 580,534 283,273Provision for employees’ terminal benefits 14,710 11,997

Operating profit before working capital changes 4,063,418 1,734,980(Increase)/decrease in inventories (3,962,497) 794,149Decrease/(increase) in accounts receivable 3,886,325 (1,497,375)Decrease/(increase) in prepayments and other receivables 23,401 (23,722)(Increase) in amounts due from related party (11,637,306) (17,255,113)(Decrease)/increase in accounts payable and accruals (4,457,330) 1,585,246Increase in amounts due to related party 3,204,176 5,029,526

Net cash (used in) operating activities (8,879,813) (9,632,309)

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment (419,552) (6,349,694)Decrease in capital work in progress - 5,065,511

Net cash (used in) investing activities (419,552) (1,284,183)

CASH FLOWS FROM FINANCING ACTIVITIESNet movement in current accounts 8,432,511 4,914,200Net movement in share application money - (6,000,000)Increase/(decrease) in term loans 172,639 (17,065)Net cash from/(used) in financing activities 8,605,150 (1,102,865)Net (decrease) in cash and cash equivalents (694,215) (12,019,357)Cash and cash equivalents at beginning of the year 846,119 12,865,476

Cash and cash equivalents at end of the year 151,904 846,119


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1 LEGAL STATUS AND ACTIVITY :

Legal Status : Golden Harvest Middle East (FZC)(the “Company”) is a Free Zone Company with limitedliability incorporated and licensed at Sharjah AirportInternational Free (SAIF) Zone, Sharjah pursuant toSharjah Emiri Decree No 2 of 1995. During the year,the commercial license of the Company has beencancelled and the Company is operating underIndustrial License No 03-04-03146 issued on 12 July2005 by SAIF Zone Authorities.

Activity : Consequent to the cancellation of commerciallicense, the principal activity of the Company ismanufacture of organic and chemical fertilizers. Theprincipal place of the business of the Company islocated at P3-04, Sharjah Airport International FreeZone, Sharjah, United Arab Emirates.

Shareholding pattern : The shareholding pattern ofthe Company at end of the year under review was asfollows:-

Name of the Nationality No of Value ofshareholder shares shares

AED

1) M/s Aries Agro Limited Indian 1,125 112,500

2) Mr. Rahul Mirchandani Indian 180 18,000

3) Mr. Jimmy Mirchandani Indian 98 9,800

4) Mr. Akshay Mirchandani Indian 94 9,400

5) Mr. Chalakudi Subramani Indian 3 300Shankaranarayan

Total 1,500 150,000Management : As per license issued by SAIF ZoneAuthorities, Chalakudi Subramani Shankaranarayanhas been appointed as Manager of the Company.

Accounting period : These financial statements relateto the period from 1 April 2009 to 31 March 2010.

2 BASIS OF PREPARATION AND SIGNIFICANTACCOUNTING POLICIES AND ESTIMATES

2.1 Basis of preparationStatement of complianceThese financial statements have been prepared inaccordance with International Financial ReportingStandards (IFRS) issued by the International Accounting

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2010Standards Board (IASB) and interpretations issuedby the International Financial Reporting InterpretationsCommittee (IFRIC) that are relevant to the operationsof the Company.

The accounting policies adopted have beenconsistently applied in dealing with items consideredmaterial to the Company’s financial statements.

Basis of measurement

The financial statements are prepared under thehistorical cost convention, modified to incorporatechanges to the carrying values of investments asdescribed in note 4 to the financial statements and tocarrying values of property, plant, and equipment asdescribed in note 3 to the financial statements.

2.2 Changes in accounting policies

In the current year, the Company has adopted allapplicable new and revised Standards andInterpretations issued by IASB and the IFRIC that areeffective for accounting periods beginning on or after1 January 2009.

In particular, the following Standards, have resultedin revised disclosure requirements for the currentperiod:

• Amendments to IAS 1 ‘Presentation ofFinancial Statements’ primarily required thefollowing disclosures:

* ‘Balance sheet’ and ‘Cash flowstatement’ have been described as‘Statement of Financial Position’, and‘Statement of Cash Flows’ respectively(optional amendments);

* All owner changes in equity arepresented in the statement of changesin equity separately from non-ownerchanges in equity;

* A statement of financial position as atthe beginning of the earliest comparativeperiod will be prepared whenever theentity retrospectively applies anaccounting policy or makes aretrospective restatement of items in itsfinancial statements, or when itreclassifies items in its financialstatements.

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• Amendments to IFRS 7 ‘Financial Instruments:Disclosures’ (issued in March 2009) requiresenhanced disclosures about fair valuemeasurements and liquidity risk. An entity shallnow classify fair value measurements using afair value hierarchy (Levels 1, 2 and 3) thatreflects the significance of the inputs used inmaking the measurements.

• There have been other amendments issued byIASB as part of its annual improvements projectin the year 2008 that are applicable foraccounting periods commencing 1 January2009. The amendments have been categorizedinto two parts by IASB. Part I containsamendments that result in accounting changesfor presentation, recognition or measurementpurposes. Part II contains amendments that areterminology or editorial changes only, which isexpected to have no or minimal effect onaccounting.

Certain amendments to existing standards havebeen published that are effective and mandatoryfor accounting periods commencing on or after1 July 2009, which the Management havedecided to adopt from the applicable periods.The amendments likely to be relevant to theCompany are as follows:

• Amendments to IFRS 3 ‘BusinessCombinations’ introduces significant changes onacquisition accounting, including the following:

* Expensing certain acquisition relatedcosts in the period in which they areincurred;

* An option to recognize the entire goodwillof an acquired entity and not just theacquiring entity’s portion of goodwill; and

* Guidance on the accounting treatment forstep by step acquisition and on partialdisposal of subsidiary (with or withoutlosing control).

• An entity shall apply this IFRS for annual periodsbeginning on or after 1 July 2009, though earlierapplication is permitted.

• Amendments to IAS 24 ‘Related partydisclosures’ has simplified the definition of arelated party, clarifying its intended meaning andeliminated inconsistencies from the definition.The amendments have also provided a partial

exemption from the disclosure requirementsfor government-related entities. An entity shallapply this IFRS for annual periods beginningon or after 1 January 2011, though earlierapplication is permitted.

• IFRS 9 ‘Financial Instruments’ was issuedpartially in November 2009 and will eventuallyreplace IAS 39 ‘Financial Instruments:Recognition and Measurement’. The chaptersissued in November 2009 related to theclassification and measurement of financialassets. An entity shall apply this IFRS for annualperiods beginning on or after 1 January 2013,though earlier application is permitted.

2.3 Significant accounting policies

a Property, plant and equipmentProperty, plant and equipment are initiallyrecorded at cost together with any incidentalexpenses of acquisition or construction.Subsequently they are stated at cost lessaccumulated depreciation and accumulatedimpairment losses.

Major costs incurred in restoring property, plantand equipment to their normal working conditionare charged to the income statement.Improvements are capitalized and depreciatedover their expected useful lives.

b DepreciationThe cost of property, plant and equipment isdepreciated by equal annual installments overthe estimated useful lives of the assets. Theestimated useful lives of the assets for thecalculation of depreciation are as follows:

Building 20 years

Machineries 10 years

Equipment 5 years

Office furniture 5 years

Motor vehicle 4 years

c Employees’ terminal benefitsProvision is made for employees’ terminalbenefits on the basis prescribed under the U.A.E.Labour Law based on employees’ salaries andnumber of years of service. The terminalbenefits are paid to employees on terminationor completion of their term of employment.

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Accordingly, the Company has no expectationof settling its employees’ terminal benefitsobligation in the near future.

d Foreign currenciesFunctional and presentation currency

The financial statements are presented in UAEDirham (AED), which is the Company’sfunctional and presentation currency.

Transaction and balances

Transactions in foreign currencies aretranslated into the functional currency usingthe exchange rates prevailing at the transactiondates. Monetary assets and liabilities expressedin foreign currencies at the balance sheet dateare translated at rates of exchange ruling atthe balance sheet date. Exchange differencesarising in these cases are dealt with in theincome statement.

e Accounts receivableAccounts receivable originated by the Companyare measured at cost. An allowance for creditlosses of accounts receivable is establishedwhen there is objective evidence that theCompany will not be able to collect the amountsdue. Indicators that the accounts receivable areimpaired include consistent default in thepayments when due, financial difficulties of thecustomer and other indicators. When anaccounts receivable is considered uncollectible,it is written off against the allowance account forcredit losses. Subsequent recoveries of amountspreviously written off are credited in thestatement of income. The carrying value ofaccounts receivable approximate to their fairvalue due to the short term nature of thosereceivables.

f Accounts payable and accrualsLiabilities are recognized for amounts to be paidin the future for goods or services received,whether or not billed to the Company.

g Finance charges

Finance charges that are directly attributable tothe acquisition and constructing of propertyand equipment are capitalized as part of thecost of those assets. Other finance chargesare recognized as an expense in the period inwhich they are incurred.

h Cash and cash equivalents

Cash and cash equivalents consist ofunrestricted cash and bank balances.

i Financial instruments

Financial assets and financial liabilities arerecognised on the Company’s balance sheetwhen the Company becomes a party to thecontractual provisions of the instrument.

j Borrowing costsBorrowing costs that are directly attributable tothe acquisition and constructing of property andequipment are capitalized as part of the cost ofthose assets. Other borrowing costs arerecognised as an expense in the year in whichthey are incurred.

k ImpairmentFinancial assets

At each balance sheet date, the Companyassesses if there is any objective evidenceindicating impairment of financial assets or noncollectability of receivables.

An impairment loss, if any, arrived at as adifference between the carrying amount and therecoverable amount, is recognized in thestatement of income. The recoverable amountrepresents the present value of expected futurecash flows discounted at original effectiveinterest rate. Cash flows relating to short termreceivables are not discounted.

Non financial assets

At each balance sheet date, the Companyassesses if there is any indication of impairmentof non financial assets. If an indication exists,the Company estimates the recoverable amountof the asset and recognizes an impairment lossin the statement of income. The Company alsoassesses if there is any indication that animpairment loss recognized in prior years nolonger exists or has reduced. The resultantimpairment loss or reversals are recognizedimmediately in the statement of income.

l Investments

Associates

An entity over which the Company exercisessignificant management influence but not

83


control is classified as an associate and isaccounted for using the equity method.

Under the equity method, the investments areinitially recorded at cost and the carrying amountis subsequently adjusted to recognize theinvestor’s share profits or losses of the investeecompany after the acquisition date. Distributionsreceived from the investee company are deductedfrom the carrying value of the investments.

m Financial liabilities

All financial liabilities are initially measured atcost and are subsequently measured atamortized cost.

n SalesSales represents the invoiced value of goodssold during the year less returns and discounts.Revenue is recognized when the significant risksand rewards of ownership have been transferredto the buyer, recovery of the consideration isprobable, the associated costs and possiblereturn of goods can be estimated reliably, andthere is no continuing management involvementwith the goods.

o Contingent liabilities and contingent assetsA contingent liability is a possible obligation thatarises from past events and whose existence willonly be confirmed by the occurrence or non-occurrence of one or more uncertain future eventsnot wholly within the control of the Company. Itcan also be a present obligation arising from thepast events that is not recognized because it isnot probable that outflow of economic resourceswill be required or the amount of obligation cannotbe measured reliably.

Contingent liabilities are not recognized but aredisclosed in the notes to the accounts. When achange in the probability of an outflow occursso that outflow is probable, it will then berecognized as provision.

A contingent asset is a possible asset that arisesfrom past events and whose existence will beconfirmed only by the occurrence or non-occurrence of one or more uncertain future eventsnot wholly within the control of the Company.Contingent assets are not recognized but aredisclosed in the notes to the accounts when aninflow of economic benefits is probable. When

an inflow is virtually certain, an asset isrecognized.

2.4 Significant accounting estimatesThe preparation of financial statements requiresmanagement to make judgments, estimates andassumptions that affect the application of policies andreported amounts of assets and liabilities, income andexpenses. Actual results may differ from theseestimates.

Estimates and underlying assumptions are reviewedon an ongoing basis. Revisions to accountingestimates are recognised in the period in which theestimate is revised if the revision affects only that periodor in the period of the revision and future periods if therevisions affects both current and future periods.

The key assumptions concerning the future and otherkey sources of estimation uncertainty at the balancesheet, that have a significant risk of causing materialadjustment to the carrying amounts of assets andliabilities within the next financial year are:

Impairment of accounts receivable andamounts due from related parties

An estimate of the collectible amount of trade accountsreceivable and amounts due from related parties aremade when collection of the full amount is no longerprobable. For individually significant amounts, thisestimation is performed on an individual basis.Amounts which are not individually significant, butwhich are past due, are assessed collectively and anallowance applied according to the length of time pastdue, based on historical recovery rates. Any differencebetween the amounts actually collected in futureperiods and the amounts expected to be collected willbe recognized in the income statement.

3 PROPERTY, PLANT AND EQUIPMENT

Movement in property, plant and equipment are givenon page number 22.

Motor vehicles purchased under financingarrangements are subject to a charge.

4 INVESTMENTS(Un-quoted at cost)At the balance sheet date, the Company hadinvestment in the following associate company inaccordance with the terms and conditions of theMemorandum and Articles of Association of theassociate company.

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Name of associate Activity Percentag Value of holding

Mapco Fertilizer Industries Manufacture 25% 1,200,000FZC, Hamriyah Free Zone, of chemicalSharjah (25 shares of AED fertilizer48,000)

The above associate company is in the process of settingup a manufacturing facility and has not commencedcommercial operations at the balance sheet date. Theamendment of the statutory records of the Companymaintained by the Hamriyah Free Zone Authority to reflectthe above investment is under progress.

5 INVENTORIES


Raw materials 4,448,649 1,582,330Finished goods 1,766,430 683,991Packing materials 21,763 8,024

6,236,842 2,274,345

6 ACCOUNTS RECEIVABLE


Accounts receivable 150,000 4,036,325

150,000 4,036,325

(i) At the balance sheet date net accounts receivable isdue from one customer (2008-09 - 62% from onecustomer).

(ii) The aging analysis of the accounts receivable are asfollows:


Due for less than 6 months 150,000 1,516,325Due for more than 6 months - 2,520,000

150,000 4,036,325

(iii) Accounts receivable are considered collectible basedon historic experience.

7. PREPAYMENTS AND OTHER RECEIVABLES


Prepayments 85,309 101,260

Deposits 57,400 44,640

Advance to suppliers - 30,308

Other receivables 19,889 9,791

162,598 185,999

8 RELATED PARTY TRANSACTIONSThe Company has in the ordinary course of business,entered into trading, financial and service transactionswith concerns, in which the shareholders/directors/manager of the branch and/or their relatives have aninvesting/controlling interest.

The prices and terms of these transactions wereapproved by the management and consideredcomparable to those charged by third parties. Amountsdue from/to related parties do not attract interest andare payable on demand.

Amount due from Related Parties


Aries Agro Limited 1,179,124 3,326,997

MAPCO Fertilizers 1,212,700 977,700

Amarak Chemicals 28,698,720 15,066,386FZC, Fujairah

Mirabelle Holdings - 82,155

31,090,544 19,453,238

Amount due from related parties include AED15,137,987 being amount invested by the Companyin Amarak Chemicals FZC, Fujairah towards advancefor allotment of shares.Amount due to Related Parties


Aries Agro Limited 22,791,901 19,587,725

22,791,901 19,587,725

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Prices and terms of these transactions wereapproved by the management and consideredcomparable with those charged by third parties.The volumes of related party transactions duringthe year were as follows:-


Sales 7,900,111 18,893,344

Purchases 3,194,549 37,117

Finance charges 248,515 918,513

Key management compensation

(including Director’s emoluments)


Directors remuneration 84,000 84,000

House rent - 60,000

84,000 144,000

9 CASH AND BANK BALANCES


Cash in hand 432 690

Current account with banks 151,472 845,429

151,904 846,119

10 SHARE CAPITAL

2010 2009AED AED

Authorised, issued and 150,000 150,000 paid-up capital

(1,500 shares ofAED 100 each)

150,000 150,000

11 SHAREHOLDERS’ CURRENT ACCOUNTS

Shareholders’ current account balances do not attractinterest and there are no defined repaymentarrangements.

12 RESERVE FUND

This represents reserve created out of profit of theCompany in accordance with the provisions ofMemorandum and Articles of Association of theCompany.

13 EMPLOYEES’ TERMINAL BENEFITS

The provision for end of service benefits foremployees is made in accordance with therequirements of the U.A.E. Labour Laws. This is anunfunded defined benefits retirement plan. Employeesare entitled to benefits based on length of serviceand final remuneration. Accrued employees’ terminalbenefits are payable on termination of employment.The cost of providing these benefits is charged asan expense on an annual basis and the charge forthe year ended 31 March 2010 amounted to AED14,710.

14 TERM LOANS


Motor Vehicle loans 192,576 19,937

192,576 19,937

Installments falling due within 12 months of the balancesheet date - classified as current liabilities.

TERM LOANS (continued)


Short term portion 76,484 17,064

Long term portion 116,092 2,873

Long term loans represent installments on vehicleloans not payable within 12 months of the balancesheet date. Vehicle loan taken from finance companiesfor purchase of vehicles are secured by a charge onthe motor vehicle purchased under such financingarrangements.

15 ACCOUNTS PAYABLE AND ACCRUALS


Trade payables 182,443 4,660,880

Accrued expenses 35,133 14,026

217,576 4,674,906

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16 SALES


Trading 12,127,500 17,628,429Manufacturing 7,939,028 2,781,240

20,066,528 20,409,669

17 COST OF SALES


Opening stock 2,274,345 3,068,494Purchases 18,409,484 15,986,053Direct expenses 539,211 373,072Less: Closing stock (6,236,842) (2,274,345)

14,986,198 17,153,274

18 OTHER INCOME


Commission income 75,125 84,307Penalty amount received - 217,500Interest on fixed deposit - 9,122Other income - 39,512

75,125 350,441

19 ADMINISTRATION, SELLING AND GENERALEXPENSES


Salaries and benefits 218,310 202,517Rent 255,024 263,955Communication expenses 52,120 55,787Legal and professional charges 78,143 98,142Repairs and maintenance 40,521 16,774Travelling and conveyance 36,402 25,649Printing and stationery 6,269 7,853Insurance charges 3,410 6,221Other expenses 103,551 168,057

793,750 844,955

20 FINANCE CHARGES


Bank charges and interest 39,960 66,160

Loss on currency 24,522 54,225exchange fluctuation

Interest charges 248,515 918,513

312,997 1,038,898

Interest charges represents amount paid to a relatedparty, Aries Agro Ltd, Mumbai.

21 FINANCIAL RISK AND CAPITAL MANAGEMENT

21.1 Financial risk factorsFinancial assets of the Company include cash, bankbalances, prepayments, amounts due from relatedparties and accounts receivable. Financial liabilitiesinclude accounts payable, accruals, amounts due torelated parties and motor vehicle loans.

The management believes that the fair values of thefinancial assets and liabilities approximate to theircarrying amounts.

The Company’s financial risk management programmefocuses on the unpredictability of financial markets andseeks to minimize potential adverse effects of thefinancial performance. Under the Company’s riskmanagement programme, management identifies anddocuments key risks and sets out policies andprocedures required to mitigate these risks. Theidentified key risks are:

a) Currency risk

The majority of the Company’s financial assetsand financial liabilities are either denominatedin local currency (AED) or currencies fixed tothe AED. Hence the management believes thatthere would not be a material impact on theprofitability if these foreign currencies weakensor strengthens against the AED with all overvariables held constant.

b) Interest rate risk

The Company’s interest rate risk arises frommotor vehicle loans. The interest rates on motorvehicle loans are at commercial rates negotiatedwith banks and are largely subject to regularrevision.

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Although the Company is exposed to interestrate risk the Board of Directors consider thatthe impact of interest rate will not be material tothe results of operations.

c) Credit risk

The Company is potentially exposed toconcentration of credit risk from its financialassets which comprise principally bankbalances, amounts due from related parties andaccounts receivable. The Company’s bankaccounts are placed with high credit qualityfinancial institutions. The credit risk on accountsreceivables and amounts due from relatedparties are subjected to credit evaluations andan allowance has been made for estimatedirrecoverable amounts. The amounts presentedin the balance sheet are net of allowances fordoubtful receivables. The Company is notexposed to any significant concentration of creditrisk because its exposure is spread over financialinstitutions and a large number of customers.

d) Liquidity riskThe Company manages its liquidity risk byensuring it has sufficient liquid cash balances tomeet its payment obligations as they fall due.The Company maintains good working relationswith its banks and ensures compliance with thecovenants as stipulated in facility agreements.

21.2 Capital managementThe Company’s objectives when managingcapital are to safeguard the entity’s ability tocontinue as a going concern, so that it cancontinue to provide returns for shareholders bypricing products and services commensuratelywith the level of risk.

The Company sets the amount of capital fundsin accordance with the planned level of

operations and in proportion to the levels ofrisk. The Company manages the shareholders’funds and makes adjustments to it in the light ofchanges in economic conditions and the riskcharacteristics of the underlying assets. In orderto maintain or adjust the shareholders’ funds,the Company may adjust the amount ofdividends paid to shareholders, return funds toshareholders, issue new shares, or sell assetsto reduce its exposure to debt.

22 CAPITAL COMMITMENTSThere were no material capital commitments at thebalance sheet date.

23 CONTINGENT LIABILITIESThere are no material contingent liabilities at thebalance sheet date.

24 SEGMENT REPORTING

The Company does not have distinguishable businesssegments. However the geographical distribution ofrevenues are set out as follows.


United Arab Emirates 12,166,417 1,516,325

Other countries:

India 7,900,111 18,893,344

20,066,528 20,409,669

25 COMPARATIVE FIGURESPrevious year’s figures have been regrouped orreclassified wherever necessary to make themcomparable to those of the current year.

26 LEVEL OF PRECISION

All figures are rounded off to nearest Dirhams (AED).

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NOTICE OF 4NOTICE OF 4NOTICE OF 4NOTICE OF 4NOTICE OF 4THTHTHTHTH ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING

Notice is hereby given that the Fourth Annual General Meeting of the Members of ARIES AGRO CARE PRIVATE LIMITEDwill be held on the Wednesday, 15th September, 2010 at 10.30 AM at the Registered Office of the Company at Aries House,Plot No. 24, Deonar, Govandi (East), Mumbai -400 043 to transact the following business:-

1. To receive, consider, approve and adopt the audited Balance Sheet as at 31st March, 2010 and Profit and LossAccount for the year ended as on that date together with the Reports of the Board of Directors and Auditors thereon.

2. To appoint M/s. Kirti D. Shah & Associates, Chartered Accountants, Mumbai, as the Auditors of the Company, to holdoffice from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting andto authorize the Board of Directors to fix their remuneration.


For Aries Agro Care Private Limited

Place: Mumbai Dr. Jimmy Mirchandani

Date: 30th June, 2010 Director

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND ANDVOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. THE PROXY IN ORDER TO BE EFFECTIVE SHOULD BE LODGED WITH THE COMPANY AT LEAST 48 HOURS BEFORETHE COMMENCEMENT OF THE MEETING.

89

Aries Agro Care Private Limited

DIRECTOR’S REPORTDIRECTOR’S REPORTDIRECTOR’S REPORTDIRECTOR’S REPORTDIRECTOR’S REPORTTo,

The Members of

Aries Agro Care Private Limited.

Your Directors are pleased to present their Fourth AnnualReport together with Audited Statement of Accounts of theCompany for the period ended 31st March, 2010.

1. FINANCIAL RESULTS :

The Company started its operation during the previousyear and during year under review the Companygenerated a turnover of Rs. 1,54,96,580/- as againstthe previous year of Rs. 11,74,075/-. The Profit of theCompany after tax was Rs. 4,67,964/-.

2. CURRENT STATUS

The business of the Company is progressing well andthe trends indicate that there will be substantial growthin the current financial year.

3. DIVIDEND :

Since the Company has accumulated losses yourDirectors do not recommend any Dividend.

4. DEPOSITS :

The Company has not accepted any Fixed Depositsfrom the Public.

5. PARTICULARS OF EMPLOYEES :

The Directors are to report that there are no employeeswho were in receipt of remuneration in excess of theprovisions of Section 217(2A) of the Companies Act,1956 read with the Companies (Particulars ofEmployees) Rules 1975.

6. CONSERVATION OF ENERGY AND TECHNOLOGYABSORPTION AND FOREGIN EXCHANGEEARNINGS AND OUTGO :

Since the Company in the first year of operationoutsourced the manufacturing activity, report pertainingto conservation of energy and technology absorptionare not applicable. However, Company has taken duecare for conserving energy while designing the Plantitself. For technology absorption, an exclusive grouphas been constituted for the purpose of technologytransfer. During the year there were no ForeignExchange earning, expenditure or outflow.

7. DIRECTORS:

In terms of Article 109 of the Articles of Association ofthe Company, Directors are not liable to retire byrotation.

8. AUDITORS :

M/s. Kirti D. Shah & Associates, CharteredAccountants, the Auditors of the Company retire at theensuing Annual General Meeting and being eligible,offer themselves for re-appointment.

9. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 217 (2AA) ofthe Companies Act, 1956 with respect to the Directors’responsibility statement, it is hereby confirmed that:

1. In preparation of the Annual Accounts,applicable accounting standards have beenfollowed.

2. The accounting policies are consistently appliedand reasonable, prudent judgment andestimates are made so as to give a true and fairview of the state of affairs of the Company atthe end of the financial year and of the profit ofthe Company for that period.

3. The Directors had taken proper and sufficientcare for the maintenance of adequateaccounting records in accordance with theprovisions of this Act for safeguarding the assetsof the Company and for preventing anddetecting fraud and other irregularities;

4. The Directors had prepared the AnnualAccounts on a ‘going concern’ basis.

10. ACKNOWLEDGEMENT :

Your Directors would like to express their gratefulappreciation for the co-operation and assistancereceived from the HDFC Bank and other relatedagencies.


For Aries Agro Care Private Limited

Place : Mumbai Dr. Jimmy MirchandaniDate : 30th June, 2010 Director

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AAAAAUDIT REPORUDIT REPORUDIT REPORUDIT REPORUDIT REPORT T T T T TTTTTO O O O O THE SHARE HOLDERS OF THE SHARE HOLDERS OF THE SHARE HOLDERS OF THE SHARE HOLDERS OF THE SHARE HOLDERS OF ARIES ARIES ARIES ARIES ARIES AAAAAGRGRGRGRGRO CARE PVTO CARE PVTO CARE PVTO CARE PVTO CARE PVT.....LLLLLTDTDTDTDTD.....i. We have audited the attached Balance sheet of ARIES

AGRO CARE PRIVATE LIMITED, as at 31st March,2010. These financial statements are responsibility ofthe company management. Our responsibility is toexpress an opinion on these financial statementsbased on our audit.







iii. The provisions of Companies (Auditor’s Report) Order,2003, (as amended from time to time) issued by theCentral Government in terms of section 227(4A) of theCompanies Act, 1956, are not applicable to theCompany.

iv. Further, we report that:


b. In our opinion, proper books of accounts asrequired by law, have been kept by the Company

so far as appears from our examination of thebooks of the Company;

c. The Balance Sheet and Profit & Loss Accountreferred to in this report are in agreement withthe books of accounts of the Company;

d. On the basis of written representations receivedfrom the directors, and taken on record by theBoard of Directors, in our opinion, none of thedirectors is disqualified from being appointedas director u/s 274(l)(g) of Companies Act, 1956;

e. In our opinion, the Balance Sheet and Profit &Loss Account dealt with by, this report complywith all material respects with the accountingstandards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956.

f. The company is not a sick company within themeaning of section 3(1)(o) of the SICA Act, 1985.Hence there is no question of payment of cessas required under section 441 A of CompaniesAct;

g. In our opinion and to the best of our informationand according to the explanations given to us,the said Balance Sheet and the Profit & LossAccount, together with notes thereon, give theinformation required by the Companies Act,1956 in the manner so required and give a trueand fair view in Conformity with the accountingprinciples generally accepted in India.


March, 2010.



Kirti D. ShahPlace : Mumbai Proprietor

Date: 30th June, 2010 Membership No. 32371

91


ANNEXURE TO THE AUDITORS’ REPORTANNEXURE TO THE AUDITORS’ REPORTANNEXURE TO THE AUDITORS’ REPORTANNEXURE TO THE AUDITORS’ REPORTANNEXURE TO THE AUDITORS’ REPORT(This is the Annexure referred to in our Report of even date)

In terms of the information and explanations given to us andthe books and records examined by us in the normal courseof audit and to the best of our knowledge and belief, we stateas under:

i. a. The company does not have any Fixed assetshence maintenance of records showing fullparticulars including quantitative details andsituation of its fixed assets dose not arise.

b. The company does not have any Fixed assetshence the question of physical verification &material discrepancies of the same does notarise.

c. No parts of fixed assets have been disposed offduring the period, which will affect its status asgoing concern.



c. The company is maintaining proper records ofinventory. No discrepancies were noticed onphysical verification of stocks as compared tobook records and hence the question of whetherthe same have been properly dealt with thebooks of accounts does not arise.

iii. a. The company has taken loan from one partycovered in the register maintained under section301 of the Companies Act, 1956. The maximumamount outstanding during the period ended 31/03/2010 is Rs. 12,204,327 ( Previous Year Rs.11,232,354 ) and closing balance as on 31/03/2010 is Rs. 12,204,327 (Previous YearRs.19,363,643).

The Company has not given interest freeadvances to any parties covered in the Registermaintained under Section 301 of the CompaniesAct, 1956.

b. As per information and explanation provided tous, the company has not granted any loanswhich are interest free. However other terms and

conditions on which such loans and advancesgiven to Companies, Firms or Other Partieslisted in the Register maintained under section301 are not, prima facie, prejudicial to theinterest of the Company.

c. The Company is regular in repaying the principalamounts as stipulated and has been regular inthe payment of interest wherever applicable

d. As per the information given by themanagement, in case of overdue amount morethan Rs.1.00 lakhs, the reasonable steps havebeen taken by the company for recovery of theprincipal and Interest.



b. The transactions made in pursuance ofcontracts or arrangements entered in theRegister maintained under section 301 andexceeding value of Rupees Five Lakhs inrespect of any party during the period have beenmade at prices which are reasonable havingregard to the prevailing market prices at therelevant time.

vi. The Company has not accepted deposits from thepublic. Hence, the question of complying with thedirectives issued by the Reserve Bank of India andthe provisions of sections 58A and 58AA of the Actand the rules framed there under, where applicable,does not arise.

vii. The paid up capital and reserve and surplus does notexceed 50 lacs as at the commencement of thefinancial year concerned or average annual turnoverdoes not exceed 5 crore rupee for a period of threeconsecutive financial year immediately preceding thefinancial year concerned, applicability of internal auditdose not arise

92


viii. Maintenance of the cost records has been prescribedby the Central Government under section 209 (1) (d)of the act and are not applicable to the company.

ix. a. The company is generally regular in depositingstatutory dues including Provident Fund,Investor Education and Protection Fund,Employee State Insurance, Income Tax, SalesTax, Wealth Tax, Service Tax, Custom Duty,Excise Duty, Cess and any other statutory duesexcept some occasional delays.

b. Details of disputed liability in respect of tax dueson account of Income Tax, Sales Tax, ServiceTax, Custom Duty, Excise Duty, Cess togetherwith the status and the Forum before which suchdispute is pending as on 31st March 2010 is Rs.NIL.



xii. According to the records of the company, the companyhas not granted any loans and advances on the basisof security by way of pledge of shares, debenturesand other securities.


xiv. The company is not dealing or trading in shares,securities, debentures and other investments. The

shares held by the Company have been held by theCompany in its own name.


xvi. The company has not taken any term loans during theyear under audit.


xviii. According to the records of the Company and theinformation and explanation provided by themanagement, the company has not made anypreferential allotment of shares to parties andcompanies covered in the Register maintained undersection 301 of the Act.


xx. The Company has not raised any Capital during theyear and hence the question whether the managementhas disclosed the end use of money raised by publicissues and whether the same has been verified by usor not does not arise.



Kirti D. ShahPlace: Mumbai ProprietorDate: 30th June 2010 Membership No. 32371

93



PARTICULARS Schedule As at As atNo. 31 March 31 March


I SOURCE OF FUNDSSHAREHOLDERS’ FUNDS(a) Share Capital 1 100,000 100,000

100,000 100,000LOAN FUNDS(a) Unsecured Loans 2 12,204,327 11,252,354

12,204,327 11,252,354

TOTAL 12,304,327 11,352,354

II APPLICATION OF FUNDSDEFERRED TAX ASSETS - 230,950CURRENT ASSETS, LOANS & ADVANCES(a) Inventories 3 11,460,795 9,449,475(b) Sundry Debtors 4 1,193,942 259,502(c) Cash & Bank Balances 5 226,927 242,617(d) Loans & Advances 6 3,456,781 2,768,250

16,338,445 12,719,844

Less: CURRENT LIABILITIES AND PROVISIONS(a) Current Liabilities 7 4,699,098 3,124,879(b) Provisions 140,000 17,400

4,839,098 3,142,279

NET CURRENT ASSETS 11,499,347 9,577,565

MISCELLANEOUS EXPENDITURE 8 755,530 1,027,374(To the extent not written off or adjusted)

PROFIT & LOSS A/C (DEBIT BALANCE) 9 49,450 516,464

TOTAL 12,304,327 11,352,354

Significant Accounting Policies & Notes to Accounts 16

As per our Report of even date For and on behalf of the BoardFor Kirti D Shah & AssociatesChartered AccountantsKirti D Shah Dr Jimmy Mirchandani Dr Rahul MirchandaniProprietor Director DirectorMembership No 32371Place : Mumbai.Date : 30th June, 2010

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PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE YEARYEARYEARYEARYEAR ENDED 31ST ENDED 31ST ENDED 31ST ENDED 31ST ENDED 31STMARCH, 2010MARCH, 2010MARCH, 2010MARCH, 2010MARCH, 2010


2010 2009Rupees Rupees I. INCOME

(a) Sales 8,005,354 862,580(b) Other Income 10 696 -(c) Increase/(Decrease) in stock 11 7,490,530 311,495

Total Revenue 15,496,580 1,174,075 II. EXPENDITURE

(a) Consumption of Materials 12 11,762,216 792,595(b) Manufacturing / Direct Expenses 13 1,079,928 12,339(c) Interest and Financial Charges 15,190 11,523(d) Payment to & for Employees 14 320,920 407,907(e) Administration, Selling & Other Expenses 15 1,278,518 422,882(f) Amortisations 246,844 256,844

14,703,616 1,904,090 III. Profit / ( Loss ) Before Tax 792,964 (730,015) IV. Provision for Taxation

( i ) Income taxCurrent Tax (MAT Payable) 95,000 -Deferred Tax 230,950 (230,950)

( ii ) Fringe Benefit tax - 17,400

325,950 (213,550) V Profit / ( Loss ) After Tax 467,014 (516,464) VI Balance brought forward from Previous Year (516,464) - VII Amount available for Appropriations (49,450) (516,464)

VIII Balance Carried to Balance Sheet (49,450) (516,464)

Basic & Diluted Earning Per Share of Face Value of Rs. 10 each (Rs) 46.70 (51.65) Significant Accounting Policies & Notes on Accounts 16

95



STSTSTSTSTAAAAATEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLTEMENT OF CASH FLOOOOOWS FOR WS FOR WS FOR WS FOR WS FOR THE THE THE THE THE YEAR ENDED 31ST MARYEAR ENDED 31ST MARYEAR ENDED 31ST MARYEAR ENDED 31ST MARYEAR ENDED 31ST MARCH 2010CH 2010CH 2010CH 2010CH 2010


A) CASH FLOW FROM OPERATING ACTIVITIES :-Net Profit Before Tax and Extraordinary Items 7.93 (7.30)Adjustments for :-Miscellaneous Expenses Written Off 2.47 2.57Income Tax & Fringe Benefit Tax paid (0.95) (0.17)Prior Period Expenses 0.25 -Interest / Dividend being income from Investing Activities (0.01) -Interest Expense being Cash flow from Financing Activities 0.15 0.12(Profit)/Loss on sale of Fixed Assets being Cash Flow on a/c of Investing Activities 0.00 0.00

Cash Flow from Operations before Working Capital Changes 9.84 (4.79)(Increase) / Decrease in Inventories (20.11) (94.49)(Increase) / Decrease in Trade Receivables (9.34) (2.60)(Increase) / Decrease in Loans & Advances (6.89) (27.68)Increase / (Decrease) in Current Liabilities and Provisions 16.97 28.58

Cash Flow from Operating Activities (9.53) (100.98)

B) CASH FLOW FROM INVESTING ACTIVITIES :-Interest Received 0.01 -

Cash Flow from Investing Activities 0.01 -

C) CASH FLOW FROM FINANCING ACTIVITIES :-Increase / (Decrease) in Borrowings 9.52 103.44

Interest Paid (0.15) (0.12)

Cash Flow from Financing Activities 9.37 103.33

Net Increase / (Decrease) in Cash & Cash Equivalents ( A+B+C ) (0.16) 2.35

Cash & Cash Equivalents at the Beginning of the Year 2.43 0.08



(Rs. in Lakhs)

96




Rupees Rupees

SCHEDULE 1 - SHARE CAPITALAuthorised10,000 Equity Shares of Rs. 10/- each 100,000 100,000

100,000 100,000

Issued, Subscribed and Paid up Capital10,000 Equity Shares of Rs. 10/- each 100,000 100,000

PER BALANCE SHEET 100,000 100,000

SCHEDULE 2 - UNSECURED LOANS(i) Security Deposits - 20,000(ii) Loan from Holding Company 12,204,327 11,232,354


SCHEDULE 3 - INVENTORIES(At lower of cost or Net Realisable Value)Certified and valued by management)Finished Goods 7,802,025 311,495Packing Material 3,658,770 3,637,980Goods-in-Transit - 5,500,000


SCHEDULE 4 - SUNDRY DEBTORSUnsecured - Considered GoodOutstanding for a period exceeding six months 496,346 243,652Others 697,596 15,850

PER BALANCE SHEET 1,193,942 259,502

SCHEDULE 5 - CASH AND BANK BALANCESWith Scheduled Banks on Current Account 226,927 242,617


SCHEDULE 6 - LOANS & ADVANCESAdvances recoverable in cash or in kind or for value to be received- Fixed Deposit with Bank 20,000 -- Margin for Bank Guarantee 45,000 -- Advances to Goods Suppliers 3,314,085 2,681,250Sundry Deposits 32,000 87,000Interest Accrued on Fixed Deposits 696 -MAT Credit Entitlement 45,000 -


97



Rupees Rupees

SCHEDULE 7 - CURRENT LIABILITIES AND PROVISIONSSundry Creditors(a) For Goods 2,874,864 1,702,790(b) For Expenses 619,819 427,850(c) Advances from Customers 1,204,415 994,239

4,699,098 3,124,879Provisions :For Taxation

Income Tax 140,000 -Fringe Benefit Tax - 17,400

140,000 17,400


SCHEDULE 8 - MISCELLANEOUS EXPENDITURE( To the extent not written off or adjusted)Pre-Operative ExpensesBalance B/f 1,027,374 1,284,218

1,027,374 1,284,218Less : Sales Tax Deposit transferred 25,000 -Less : - 1/5 th Written Off to Profit & Loss A/c 246,844 256,844

PER BALANCE SHEET 755,530 1,027,374

SCHEDULE 9 - PROFIT & LOSS A/C (DEBIT BALANCE)Profit & Loss Account (as per annexed a/c) 49,450 516,464


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Rupees Rupees

SCHEDULE 10 - OTHER INCOMEInterest Income 696 -

PER PROFIT AND LOSS ACCOUNT 696 -

SCHEDULE 11 - INCREASE / (DECREASE) IN STOCKClosing Stock of Finished Goods 7,802,025 311,495Less : Opening Stock of Finished Goods 311,495 -

PER PROFIT AND LOSS ACCOUNT 7,490,530 311,495

SCHEDULE 12 - CONSUMPTION OF MATERIALS1) Opening Stock of Seeds - -

Add : Goods in Transit - Seeds 5,500,000 -Add : Purchases 5,846,120 6,230,414

11,346,120 6,230,414Less : Goods in Transit - Seeds - 5,500,000Seeds Traded 11,346,120 730,414

2) Opening Stock of Packing Materials 3,637,980 -Add : Purchases 436,886 3,700,161

4,074,866 3,700,161Less : Closing Stock of Packing Materials 3,658,770 3,637,980Packing Materials Consumed 416,096 62,181

Consumption of Materials 11,762,216 792,595

SCHEDULE 13 - MANUFACTURING / DIRECT EXPENSESFreight Inward 670,012 12,339Processing Charges 398,474 -Rent - Godown 11,442 -


SCHEDULE 14 - PAYMENT TO & FOR EMPLOYEESAllowances 44,000 22,763Bonus - 3,500Funds / Contribution 31,920 43,370Perks / Expenses 5,000 11,208Salary 240,000 327,066

PER PROFIT AND LOSS ACCOUNT 320,920 407,907

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Rupees Rupees

SCHEDULE 15 - ADMINISTRATION, SELLING & OTHER EXPENSESSelling CostsAdvertisement & Publicity 24,905 6,510Discount and Selling Expenses 530,524 -Freight & Delivery Expenses 327,172 20,760Selling Expenses 26,391 -Travelling Expenses 92,163 197,452

1,001,155 224,722Other Administration ExpensesAuditors Remuneration 22,060 22,060Conveyance & Motor Car Expenses 60,045 41,490General Expenses - Office 47,424 61,160Legal & Professional Charges 25,390 22,107Postage & Telephones 7,566 30,686Printing & Stationary 62,538 3,949Rent, Rates & Taxes 52,340 16,708

277,363 198,160


100




A. Basis of Preparation

The financial statements have been preparedunder the historical cost convention andmaterially comply with the Accounting Standardsissued by the Institute of Chartered Accountantsof India (ICAI) and the provisions of theCompanies Act, 1956. All income andexpenditure having material bearing on thefinancial statements have been recognized onthe accrual basis.

B. Use of Estimates

The preparation of financial statements inconformity with general ly acceptedaccounting principles requires managementto make estimates and assumptions thataffect the reported amounts of assets andliabilities and the disclosure of contingentliabilities on the date of financial statements.Actual results could differ from thoseestimates. Any revision to accountingestimates is recognized prospectively incurrent and future periods.

C. 1/5th of the Pre-operative expenses incurred arewritten off to the profit & loss account every yearcommencing from the financial year 2008-09.


a) Fixed assets to be stated at cost ofacquisition / construction / revaluationless accumulated depreciation

b) Depreciation on fixed assets to beprovided on straight line method at therates and in the manner prescribed inschedule XIV of the companies act,1956.

c) On assets acquired during the year andassets sold during the year thedepreciation to be provided pro rata forthe period used.

E. Investments

Investments to be stated at cost.

F. Inventory

a) Raw material, packing materials, stores,spares and stock-in-transit valued at cost.



G. Revenue Recognition

a) Revenue from sale of goods isrecognized when the goods are handedover to the customer or his dulyauthorized agent

b) Sales are accounted net of sales taxrecovered, sales returns, trade discounts,rebates and allowances but includeduties wherever applicable.

H. Employee Benefits

a) Bonus to be accounted on accrual basis

b) Gratuity will be provided on accrual basisand will be covered under the GroupGratuity Scheme at the appropriate time.

c) All employees are eligible for benefitunder provident fund (PF) scheme.Provident Fund of 12% coveredemployees basic salary plus dearnessallowance wherever applicable isdeducted and paid alongwith company’scontribution of an equal amount on amonthly basis to the governmentadministered provident fund scheme andcharged to profit and loss account.

I. Earning Per Share

Basic earning per Share is calculated by dividingthe net profit or loss for the year attributable to

101


Equity Shareholders by the weighted averagenumber of equity shares outstanding during theyear.


The carrying amount of the Company’s Assetsare reviewed at each balance sheet date if anyindication of any impairment exists, animpairment loss is recognized to the extent ofthe excess of the carrying amount over theestimated accountable amount.


The Company will follow the provisions ofAccounting Standard 11

a) as prescribed by ICAI though there areno Foreign Currency transactions in theyear under review.

a) There are no Current Assets and CurrentLiabilities involving transactions in foreigncurrency in the year under review.

All the accounting policies as mentioned abovewill be applied at the relevant time.

2. Current Assets, Loan & Advances and Provisions

a) The current assets and loans and advances areapproximately of the value stated, if realized inthe ordinary course of business.

b) The provision for all known liabilities is not inexcess of the amounts considered reasonablynecessary.

c) The balances of sundry creditors, sundrydebtors and loans and advances are subject toconfirmation.

3. Leave Encashment

As per the policy of the company, employees arerequired to avail their annual leave by the end of therespective financial year and leave is not allowed tobe encashed and hence no provision is considerednecessary.

4. Contingent Liability

a) Guarantees issued to Revenue / Tax Authoritiesof Rs. 2.45 Lacs. (Previous Year Rs. NIL)

5. Income Tax

The current charge for income tax is calculated inaccordance with the relevant tax regulations applicableto the company. Deferred tax assets and liabilities arerecognized for the future tax consequences attributableto timing differences that result between the profitoffered for Income Tax and profit as per financialstatements.

Deferred Tax assets and liabilities are measured usingtax rates and tax laws that have been enacted orsubstantively enacted on the balance sheet date. Theeffect on deferred tax assets and liabilities of a changein tax rates is recognized in the period that includesthe enactment date.

6. Deferred Tax: Accounting Standard - 22Sr Particulars Year Ended Year Ended

31st March 2010 31st March 2009

1. Deferred tax assets 230,950 Nilas on 1st April 2009

2. Deferred tax Nil 230,950liability/asset as on31st March 2010

3. Deferred tax 230,950 230,950charged toProfit & LossAccount

7. Earnings per ShareParticulars Year Ended Year Ended

31st March 2010 31st March 2009

Net Profit after tax as per 467,014 (516,464)Profit & Loss Accountattributable to EquityShareholders

Net Profit before exceptional 467,014 (516,464)items

Weighted Average number of 10,000 10,000Equity Shares used asdenominator for calculatingEPS

Basic & Diluted Earning per 46.70 (51.65)Share (Rs.)

Basic & Diluted Earning 46.70 (51.65)before exceptional items perShare (Rs.)

Face Value per Equity Share 10 10

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8. Related Party Disclosure

Related Party Disclosure as Per Accounting Standard – 18 issued by The Institute of Chartered Accountants of India.

PART – APART – APART – APART – APART – ADETAILS OF RELATED PARTIES (AS PER ACCOUNTING STANDARD 18)


Holding Company Aries Agro Limited Date of becoming Subsidiary of Aries AgroLimited is 5th January, 2007(Incorporation Date)

Key Management Personnel Dr. Jimmy Mirchandani Director Dr. Rahul Mirchandani Director

Relatives of Key Management Name of Key Name of Relative RelationshipPersonnel Management Person

Dr.Jimmy Mirchandani Mrs.Sarasa Mirchandani SpouseMr.Akshay Mirchandani SonMr. Amol Mirchandani SonDr.Rahul Mirchandani Brother

Dr.Rahul Mirchandani Mrs.Nitya Mirchandani SpouseMaster Armaan Mirchandani SonDr.Jimmy Mirchandani Brother


Fellow Subsidiaries Aries Agro Equipments Pvt. Ltd. A Wholly Owned Subsidiary of Aries Agro Ltd.Aries Agro Produce Pvt. Ltd. A Subsidiary Company of Aries Agro Ltd.Golden Harvest Middle East FZC A Subsidiary Company of Aries Agro Ltd.

Enterprises over which the Key Aries East West Nutrients Pvt. Ltd.Management Personnel have Aries Marketing Ltd.Significant influence or Control Blossoms International Ltd.

Sreeni Agro Chemicals Pvt. Ltd.



1 Holding company Finance unsecured loan taken 6,425,729 11,345,674Finance unsecured loan given 5,453,756 1,001,200

PARPARPARPARPART – CT – CT – CT – CT – CBALANCE OUTSTANDING WITH RELATED PARTIES.

Nature of outstanding Category Name of the party As on 31st March 2010 As on 31st March 2009

Unsecured loans Holding company Aries Agro Limited 12,204,327 11,232,354

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9. Auditors RemunerationParticulars Year Ended Year Ended

31st March 31st March2010 2009

a. Statutory audit fees 11,030 22,060

b. Tax audit fees 5,515 -

c. Taxation matters 5,515 -

d. Certification - -

10. Foreign Exchange Earnings & Outflow:During the year there were no Foreign Exchange earning, expenditure or outflow.

11. Outstanding Dues of SSI UnitsAs on 31st March 2010, the company had no dues outstanding to any small scale Undertakings. There were nodelays to making payment to any creditors during the year and hence the provisions of Interest on Delayed Paymentsto Small and Ancillary unit Act, 1993 are not attracted.

12. (A) Additional Information as per Part II of Schedule VI of the Companies Act, 1956 is as under:



Installed Capacity : Not Applicable

(B) Actual Production : NIL

(C) Quantitative and Turnover information, Consumption of Raw Materials, details of Turnover, Stocks, andProduction etc. are not applicable.

13. The Previous years figures are re-arranged and re-grouped wherever is necessary.


104



Registration No. : U01122MH2007PTC166761

State Code : 11 Balance Sheet Date : 31032010

II Capital Raised during the year

Public Issue : NIL Rights Issue : NIL

Bonus Issue : NIL Private Placement : NIL

III Position of Mobilation & Deployment of Funds (Rupees in Lacs)

Total Liabilities : 171.43 Total Assets : 171.43

Sources of Funds :

Paid-up Capital : 01.00 Reserves & Surplus : NIL

Secured Loans : NIL Unsecured Loans : 122.04

Application of Funds

Net Fixed Assets : NIL Capital Work in Progress : NIL

Investments : NIL Net Current Assets : 144.99

Miscellaneous Expenditure : 7.56 Profit & Loss Account : 0.49 (Debit Balance)

IV Performance of the Company ( Rupees in Lacs )

Turnover : 80.05 Total Expenditure : 72.13

Profit Before Tax : 7.92 Profit After Tax : 4.67

Earnings Per Share (Rs.) : 46.70 Dividend Rate : NIL

V Generic Names of Principal Products

Item Code No. (ITC Code) : 12099990Product Description Seeds for Sowing

As per our Report of even date For and on behalf of the Board


Kirti D Shah Dr Jimmy Mirchandani Dr Rahul MirchandaniProprietor Director DirectorMembership No 32371

Place : Mumbai.

Date : 30th June, 2010105


NONONONONOTICE OF 4TICE OF 4TICE OF 4TICE OF 4TICE OF 4TH TH TH TH TH ANNUANNUANNUANNUANNUAL GENERAL MEETINGAL GENERAL MEETINGAL GENERAL MEETINGAL GENERAL MEETINGAL GENERAL MEETING

Notice is hereby given that the Fourth Annual General Meeting of the Members of ARIES AGRO EQUIPMENTS PRIVATELIMITED will be held on the Wednesday, 15th September, 2010 at 11.30 a.m. at the Registered Office of the Company at AriesHouse, Plot No. 24, Deonar, Govandi (East), Mumbai-400 043 to transact the following business:-

1. To receive, consider, approve and adopt the audited Balance Sheet as at 31st March, 2010 and Profit and Loss Accountfor the year ended as on that date together with the Reports of the Board of Directors and Auditors thereon.



For Aries Agro Equipments Private Limited

Place: Mumbai Dr. Jimmy Mirchandani

Date: 30th June, 2010 Director

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTENDAND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. THE PROXY IN ORDER TO BE EFFECTIVE SHOULD BE LODGED WITH THE COMPANY AT LEAST 48 HOURSBEFORE THE COMMENCEMENT OF THE MEETING.

106



The Members ofAries Agro Equipments Private Limited.

Your Directors are pleased to present their Fourth AnnualReport together with Audited Statement of Accounts of theCompany for the year ended 31st March, 2010.

1. FINANCIAL RESULTS :The Company started its operation during the yearunder review. The Company generated a turnover ofRs. 1,39,89,628/- as against the expenses of Rs.1,20,83,837/-. The Profit of the Company after tax wasRs. 13,05,790/-.

2. CURRENT STATUS :The business of the Company is progressing well andthe trends indicate that there will be substantial growthin the current financial year.

3. DIVIDEND :Since the Company commenced business during theperiod under review your Directors have notrecommended any dividend for the period underreview.

4. DEPOSITS :




6. CONSERVATION OF ENERGY AND TECHNOLOGYABSORPTION AND FOREGIN EXCHANGEEARNINGS AND OUTGO :

Since the Company has not commenced commercialproduction during the period under review, reportpertaining to conservation of energy and technologyabsorption are not applicable. During the year therewere no Foreign Exchange earning, expenditure oroutflow.

7. DIRECTORS:In terms of Article 109 of the Articles of Association ofthe Company, Directors are not liable to retire byrotation.

8. AUDITORS :M/s. Kirti D. Shah & Associates, CharteredAccountants, the Auditors of the Company retire atthe ensuing Annual General Meeting and beingeligible, offer themselves for re-appointment.




2. The accounting policies are consistently appliedand reasonable, prudent judgment andestimates are made so as to give a true andfair view of the state of affairs of the Companyat the end of the financial year and of the profitof the Company for that period.



10. ACKNOWLEDGEMENT :Your Directors would like to express their gratefulappreciation for the co-operation and assistancereceived from the HDFC Bank and other relatedagencies.


For Aries Agro Equipments Pvt. Ltd.,

Dr. Jimmy MirchandaniPlace : Mumbai Director


107

Aries Agro Equipments Private Limited

AUDIT REPORT TO THE SHAREHOLDERS OF ARIES AGROEQUIPMENTS PVT. LTD.i. We have audited the attached Balance sheet of ARIES

AGRO EQUIPMENTS PRIVATE LIMITED, as at 31st

March, 2010. These financial statements areresponsibility of the company management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.












c. The Balance Sheet referred to in this report isin agreement with the books of accounts of theCompany


e. In our opinion, the Balance Sheet and Profit &Loss Account dealt with by, this report complywith all material respects with the accountingstandards referred to in sub-section (3C) ofsection 211 of the Companies Act, 1956.

f. The company is not a sick company within themeaning of section 3(1)(o) of the SICA Act,1985. Hence there is no question of paymentof cess as required under section 441 A ofCompanies Act;

g. In our opinion and to the best of our informationand according to the explanations given to us,the said Balance Sheet and Profit & LossAccount, together with notes thereon, give theinformation required by the Companies Act,1956 in the manner so required and give a trueand fair view in Conformity with the accountingprinciples generally accepted in India.


March, 2010.





108


ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’REPORREPORREPORREPORREPORTTTTT(This is the Annexure referred to in our Report of even date)







c. The company is maintaining proper records ofinventory. No discrepancies were noticed onphysical verification of stocks as compared tobook records and hence the question of whetherthe same have been properly dealt with thebooks of accounts does not arise.

iii. a. The company has taken loan from one partycovered in the register maintained under section301 of the Companies Act, 1956. The maximumamount outstanding during the year wasRs. 11,338,644 (Previous Year Rs. 3,520,268)and closing balance as on 31/03/2010 isRs. 11,338,644 (Previous Year Rs. 3,520,268).


b. As per information and explanation provided tous, the company has not granted any loans

which are interest free. However other termsand conditions on which such loans andadvances given to Companies, Firms or OtherParties listed in the Register maintained undersection 301 are not, prima facie, prejudicial tothe interest of the Company.

c. The Company is regular in repaying the principalamounts as stipulated and has been regular inthe payment of interest wherever applicable





vi. The Company has not accepted deposits from thepublic. Hence, the question of complying with thedirectives issued by the Reserve Bank of India andthe provisions of sections 58A and 58AA of the Actand the rules framed there under, where applicable,does not arise.

vii. The paid up capital and reserve and surplus does notexceed 50 lacs as at the commencement of thefinancial year concerned or average annual turnoverdoes not exceed 5 crore rupee for a period of threeconsecutive financial year immediately preceeding thefinancial year concerned, applicability of internal auditdose not arise

109




b. Details of disputed liability in respect of tax dueson account of Income Tax, Sales Tax, ServiceTax, Custom Duty, Excise Duty, Cess togetherwith the status and the Forum before which suchdispute is pending as on 31st March 2010 is Rs.NIL.














Kirti D. Shah

Place: Mumbai Proprietor

Date: 30th June 2010 Membership No. 32371

110





I SOURCE OF FUNDSSHAREHOLDERS’ FUNDS(a) Share Capital 1 100,000 100,000(b) Reserves & Surplus 2 1,305,790 -

1,405,790 100,000LOAN FUNDS(a) Unsecured Loans 3 11,338,644 3,520,268

11,338,644 3,520,268

TOTAL 12,744,435 3,620,268

II APPLICATION OF FUNDSCURRENT ASSETS, LOANS & ADVANCES(a) Inventories 4 2,469,688 -(b) Sundry Debtors 5 6,615,416 -(c) Cash & Bank Balances 6 1,555,639 2,148(d) Loans & Advancees 7 139,350 15,000

10,780,093 17,148Less: CURRENT LIABILITIES AND PROVISIONS(a) Current Liabilities 8 573,384 319,038(b) Provisions 600,000 -

1,173,384 319,038

NET CURRENT ASSETS 9,606,709 (301,890)MISCELLANEOUS EXPENDITURE 9 3,137,726 3,922,158( To the extent not written off or adjusted)

TOTAL 12,744,435 3,620,268



111


PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE PROFIT & LOSS ACCOUNT FOR THE YEARYEARYEARYEARYEAR ENDED 31ST ENDED 31ST ENDED 31ST ENDED 31ST ENDED 31STMARCH, 2010MARCH, 2010MARCH, 2010MARCH, 2010MARCH, 2010

Particulars Schedule Year EndedNo. 31 March

2010Rupees I. INCOME

(a) Sales 13,989,628

Total Revenue 13,989,628

II. EXPENDITURE

(a) Consumption of Materials 10 10,562,037

(b) Interest and Financial Charges 16,336

(c) Payment to & for Employees 11 172,638

(d) Administration, Selling & Other Expenses 12 548,395

(e) Amortisations 784,432

12,083,837

III. Profit / ( Loss ) Before Tax 1,905,790

IV. Provision for Taxation

( i ) Income tax

Current Tax 600,000

600,000

V Profit / ( Loss ) After Tax 1,305,790

VI Balance brought forward from Previous Year -

VII Amount available for Appropriations 1,305,790

VIII Balance Carried to Balance Sheet 1,305,790

Basic & Diluted Earning Per Share of Face Value of Rs. 10 each (Rs) 130.58


As per our Report of even date For and on behalf of the BoardFor Kirti D Shah & AssociatesChartered Accountants


Place : Mumbai.


112




Rupees Rupees

A) Cash Flow from Operating Activities :-Net Profit Before Tax and Extraordinary Items 19.06 -Adjustments for :-Miscellaneous Expenses Written Off 7.84 (7.95)Income Tax & Fringe Benefit Tax paid (6.00) -Interest Expense being Cash flow for Financing Activities 0.16 -

Cash Flow from Operations before Working Capital Changes 21.07 (7.95)(Increase) / Decrease in Inventories (24.70) -(Increase) / Decrease in Trade Receivables (66.15) -(Increase) / Decrease in Loans & Advances (1.24) (0.15)Increase / (Decrease) in Current Liabilities and Provisions 8.54 0.23


B) Cash Flow from Investing Activities :-

Cash Flow from Investing Activities - -

C) Cash Flow from Financing Activities :-Increase / (Decrease) in Borrowings 78.18 7.67Interest Paid (0.16) -


Net Increase / (Decrease) in Cash & Cash Equivalents ( A+B+C ) 15.53 (0.20)Cash & Cash Equivalents at the Beginning of the Year 0.02 0.22





Place : Mumbai.


(Rs. in Lakhs)

113


SCHEDULES SCHEDULES SCHEDULES SCHEDULES SCHEDULES ANNEXED ANNEXED ANNEXED ANNEXED ANNEXED TTTTTO O O O O AND FORMING PAND FORMING PAND FORMING PAND FORMING PAND FORMING PARARARARART OF BALANCE SHEETT OF BALANCE SHEETT OF BALANCE SHEETT OF BALANCE SHEETT OF BALANCE SHEETAS AS AS AS AS AAAAAT 31ST MART 31ST MART 31ST MART 31ST MART 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010


Rupees Rupees

SCHEDULE 1 - SHARE CAPITALAuthorised10,000 Equity Shares of Rs. 10/- each 100,000 100,000

100,000 100,000

Issued, Subscribed and Paid up Capital10,000 Equity Shares of Rs. 10/- each 100,000 100,000


SCHEDULE 2 - RESERVES & SURPLUSPROFIT & LOSS ACCOUNT (as per annexed a/c) 1,305,790 -

1,305,790 -

PER BALANCE SHEET 1,305,790 -

SCHEDULE 3 - UNSECURED LOANS(i) Loan from Holding Company 11,338,644 3,520,268


SCHEDULE 4 - INVENTORIES(At lower of cost or Net Realisable Value)(Certified and valued by management)Finished Goods 2,469,688 -


SCHEDULE 5 - SUNDRY DEBTORSUnsecured - Considered GoodOutstanding for a period exceeding six months 121,474 -Others 6,493,942 -


SCHEDULE 6 - CASH AND BANK BANALCESWith Scheduled Banks on Current Account 1,555,639 2,148


114



Rupees Rupees

SCHEDULE 7 - LOANS & ADVANCESUnsecured - Considered GoodAdvances Recoverable in Cash or in Kind or for value to be receivedStaff Loans - 15,000Sundry Deposits 138,000 -Tax Refunds Awaited (MVAT) 1,350 -


SCHEDULE 8 - CURRENT LIABILITIES AND PROVISIONSSundry Creditors(a) For Expenses 352,595 319,038(b) Advances from Customers 220,789 -

573,384 319,038Provisions :

For Taxation Income Tax 600,000 -

600,000 -


SCHEDULE 9 - MISCELLANEOUS EXPENDITURE( To the extent not written off or adjusted)Pre-Operative ExpensesBalance B/f 3,922,158 3,127,594Add :- Additions during the year - 794,564

3,922,158 3,922,158Less : - 1/5 th Written Off to Profit & Loss A/c 784,432 -


115


SCHEDULES SCHEDULES SCHEDULES SCHEDULES SCHEDULES ANNEXED ANNEXED ANNEXED ANNEXED ANNEXED TTTTTO O O O O AND FORMING PAND FORMING PAND FORMING PAND FORMING PAND FORMING PARARARARART OF PRT OF PRT OF PRT OF PRT OF PROFIT & LOSSOFIT & LOSSOFIT & LOSSOFIT & LOSSOFIT & LOSSACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2010

Particulars Year Ended31 March, 2010

Rupees

SCHEDULE 10 - CONSUMPTION OF MATERIALS1) Opening Stock -

Add : Purchases 13,031,725

13,031,725Less : Closing Stock 2,469,688

Consumption of Materials 10,562,037

SCHEDULE 11 - PAYMENT TO & FOR EMPLOYEESAllowances 16,678Funds / Contribution 9,429Perks / Expenses 2,637Salary 90,442Staff welfare 53,452

PER PROFIT AND LOSS ACCOUNT 172,638

SCHEDULE 12 - ADMINISTRATION, SELLING & OTHER EXPENSESSelling CostsAdvertisement & Publicity 7,950Discount and Selling Expenses 52,202Freight & Delivery Expenses 253,120Selling Expenses 31,757

345,029

Other Administration ExpensesAuditors Remuneration 22,060General Expenses - Office 45,072Legal & Professional Charges 46,501Postage & Telephones 16,936Printing & Stationary 34,755Rent, Rates & Taxes 38,042

203,366

PER PROFIT AND LOSS ACCOUNT 548,395

116






B. Use of Estimates

The preparation of financial statements inconformity with generally accepted accountingprinciples requires management to makeestimates and assumptions that affect thereported amounts of assets and liabilities andthe disclosure of contingent liabilities on the dateof financial statements. Actual results could differfrom those estimates. Any revision to accountingestimates is recognized prospectively in currentand future periods.

C. 1/5th of the pre-operative expenses incurred arewritten off to the Profit & loss account every yearcommencing from the current financial year.


a) Fixed assets to be stated at cost ofacquisition / construction / revaluationless accumulated depreciation

b) Depreciation on fixed assets to beprovided on straight line method at therates and in the manner prescribed inSchedule XIV of the Companies Act,1956.

c) On assets acquired during the year andassets sold during the year thedepreciation has been provided pro ratafor the period used.

E. Investments


F. Inventory

a) Raw material, packing materials, Stores,Spares and Stock-in-transit to be valuedat cost.


c) Waste and scrap will not separatelyvalued being insignificant in value






b) Gratuity will be provided on accrualbasis and will be covered under thegroup gratuity scheme at theappropriate time.

c) All employees are eligible for benefitunder provident fund (PF) scheme.Provident Fund of 12% coveredemployees basic salary plus dearnessallowance wherever applicable isdeducted and paid alongwithcompany’s contribution of an equalamount on a monthly basis to thegovernment administered providentfund scheme and charged to profit andloss account.

117



Basic earning per Share is calculated by dividingthe net profit or loss for the year attributable toEquity Shareholders by the weighted averagenumber of equity shares outstanding during theyear.




The Company will follow the provision ofaccounting standards 11 as prescribed by ICAIthough,

a) There are no foreign currencytransactions in the year under review.

b) There are no Current Assets and CurrentLiabilities involving transactions in foreigncurrency in the year under review.




b) The provision for all known liabilities is not inexcess of the amounts considered reasonablynecessary.

c) The balances of Sundry Creditors, SundryDebtors and Loans and Advances are subjectto confirmation.

3. Leave Encashment

As per the policy of the company, employees arerequired to avail their annual leave by the end of therespective financial year and leave is not allowed to

be encashed and hence no provision is considerednecessary.

4. Contingent Liability

a) Guarantees issued to Revenue / Tax Authoritiesof Rs. 0.20 Lacs. (Previous Year Rs. NIL)

5. Income Tax

The current charge for income tax is calculated inaccordance with the relevant tax regulations applicableto the Company. Deferred tax assets and liabilities arerecognized for the future tax consequences attributableto timing differences that result between the profit offeredfor Income tax and profit as per financial statements.

Deferred tax assets and liabilities are measured usingtax rates and tax laws that have been enacted orsubstantively enacted on the balance sheet date. Theeffect on deferred tax assets and liabilities of a changein tax rates is recognized in the period that includesthe enactment date.


Since there is no difference between taxable income& Accounting income, differed tax has not beenadjusted and accounted for the year.

7. Earnings per Share

Particulars Year Ended31st March 2010

Net Profit after tax as per 1,305,790Profit & Loss Accountattributable to Equity Shareholders

Net Profit before exceptional items 1,305,790

Weighted Average number of Equity 10,000Shares used as denominator forcalculating EPS

Basic & Diluted Earning per Share (Rs.) 130.58

Basic & Diluted Earning before 130.58exceptional items per Share (Rs.)

Face Value per Equity Share 10

118


8. Related Party Disclosure

Related Party Disclosure as Per Accounting Standard – 18 issued by The Institute of Chartered Accountants of India.

PART – APART – APART – APART – APART – ADETAILS OF RELATED PARTIES (AS PER ACCOUNTING STANDARD 18)


Holding Company Aries Agro Limited Date of becoming Subsidiary of Aries AgroLimited is 5th January, 2007( Incorporation Date )






Fellow Subsidiaries Aries Agro Care Pvt. Ltd. A Wholly Owned Subsidiary of Aries Agro Ltd.Aries Agro Produce Pvt. Ltd. A Subsidiary Company of Aries Agro Ltd.Golden Harvest Middle East FZC A Subsidiary Company of Aries Agro Ltd.

Enterprises over which the Key Aries East West Nutrients Pvt. Ltd.Management Personnel have Aries Marketing Ltd.Significant influence or Control Bloosoms International Ltd.




1 Holding company Finance unsecured loans – given - 14,543Finance unsecured loans – taken 370,077 781,400Purchases 13,034,072 -Sales 220,303 -Payment (net of receipt) for goods 5,585,772Receipts from sale of goods 220,303

119



Nature of outstanding Category Name of the partyAs on 31st March 2010 As on 31st March 2009

Unsecured loans Holding company Aries Agro Limited 11,338,644 3,520,2689.

9 Auditors Remuneration

Particulars Year Ended 31st March 2010 Year Ended 31st March 2009a. Statutory audit fees 11,030 22,060

b. Tax audit fees 5,515 -

c. Taxation matters 5,515 -


10. Foreign Exchange Earnings & Outflow:

During the year there was no foreign exchange earning, expenditure or outflow.

11. Outstanding Dues of SSI UnitsAs on 31st March 2010, the Company had no dues outstanding to any small scale Undertakings. There were nodelays to making payment to any creditors during the year and hence the provisions of interest on delayed paymentsto small and ancillary unit Act, 1993 are not attracted.

12. (A) Additional information as per part II of schedule VI of the Companies Act, 1956 is as under:(As certified by the management and relied upon by the auditor)

Licensed capacity : Not applicable

Installed capacity : Not applicable

(B) Actual Production : Nil

(C) Quantitative and turnover information, consumption of raw materials, details of turnover, stocks, and productionetc. are not applicable.

13. The Previous years figures are re-arranged or re-grouped wherever is necessary. The company has started itscommercial operations during the year only and hence there were no transactions in the profit & loss account duringthe previous year.




Place : Mumbai.


120








III Position of Mobilisation & Deployment of Funds (Rupees in Lacs)


Sources of Funds :

Paid-up Capital : 01.00 Reserves & Surplus : 13.06





Miscellaneous Expenditure : 31.38


Turnover : 139.90 Total Expenditure : 120.84

Profit Before Tax : 19.06 Profit After Tax : 13.06

Earnings Per Share (Rs.) : 130.58 Dividend Rate : NIL


Item Code No. (ITC Code) : 84248100Product Description Seeds for Sowing




Place : Mumbai.


121


NOTICE OF 2NOTICE OF 2NOTICE OF 2NOTICE OF 2NOTICE OF 2NDNDNDNDND ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING

Notice is hereby given that the Second Annual General Meeting of the Members of ARIES AGRO PRODUCE PRIVATELIMITED will be held on the Wednesday, 15th September, 2010 at 12.30 p.m. at the Registered Office of the Company at AriesHouse, Plot No. 24, Deonar, Govandi (East), Mumbai-400 043 to transact the following business:-

1. To receive, consider, approve and adopt the audited Balance Sheet as at 31st March, 2010 and Profit and Loss Accountfor the year ended as on that date together with the Reports of the Board of Directors and Auditors thereon.



For Aries Agro Produce Private Limited

Place: Mumbai Dr. Jimmy MirchandaniDate: 30th June, 2010 Director

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TOATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. THE PROXY IN ORDER TO BE EFFECTIVE SHOULD BE LODGED WITH THE COMPANY AT LEAST 48 HOURSBEFORE THE COMMENCEMENT OF THE MEETING.

122

2nd Annual Report 2009-2010


The Members of

Aries Agro Produce Private Limited.

Your Directors are pleased to present the their SecondAnnual Report together with Audited Statement of Accountsof the Company for the period ended 31st March, 2010.

1. FINANCIAL RESULTS :The Company has incurred an expenditure of Rs.25,490/- during the year under review and the samehas been treated as Pre-Operative Expenses.

2. STATUS OF THE PROJECT :The operations of the Company has not yetcommenced which is likely to commence shortly. TheCompany has already entered into Memorandum ofUnderstanding with the Government of Gujarat forCorporate Farming and Food Processing operationswhich is likely to commence in the current financialyear.

3. DIVIDEND :Since the Company has not commenced commercialproduction during the period under review, theCompany has not made any profits. Hence, yourDirectors have not recommended any dividend for theperiod under review.

4. DEPOSITS :




6. CONSERVATION OF ENERGY AND TECHNOLOGYABSORPTION AND FOREGIN EXCHANGEEARNINGS AND OUTGO :Since the Company has not commenced commercialproduction during the period under review, report

pertaining to conservation of energy and technologyabsorption are not applicable. During the year therewere no Foreign Exchange earning, expenditure oroutflow.

7. DIRECTORS:In terms of Article 109 of the Articles of Association ofthe Company, Directors are not liable to retire byrotation.

8. AUDITORS :M/s. Kirti D. Shah & Associates, CharteredAccountants, the Auditors of the Company retire at theensuing Annual General Meeting and being eligible,offer themselves for re-appointment.




2. The accounting policies are consistently appliedand reasonable, prudent judgment andestimates are made so as to give a true and fairview of the state of affairs of the Company atthe end of the financial year and of the profit ofthe Company for that period.




For Aries Agro Produce Pvt. Ltd.,

Place : Mumbai Dr. Jimmy Mirchandani

Date : 30th June, 2010 Director

123

Aries Agro Produce Private Limited

AUDIT REPORT TO THE SHAREAUDIT REPORT TO THE SHAREAUDIT REPORT TO THE SHAREAUDIT REPORT TO THE SHAREAUDIT REPORT TO THE SHAREHOLDERS OF HOLDERS OF HOLDERS OF HOLDERS OF HOLDERS OF ARIES ARIES ARIES ARIES ARIES AAAAAGRGRGRGRGRO PRO PRO PRO PRO PRODUCEODUCEODUCEODUCEODUCEPVTPVTPVTPVTPVT..... L L L L LTDTDTDTDTD.....i. We have audited the attached Balance sheet of ARIES

AGRO PRODUCE PRIVATE LIMITED, as at 31st

March, 2010. These financial statements areresponsibility of the company management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.

ii. We conducted our audit in accordance with auditingstandards generally accepted in India. Those standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes











c. The Balance Sheet referred to in this report isin agreement with the books of accounts of theCompany


e. In our opinion, the Balance Sheet dealt with by,this report comply with all material respects withthe accounting standards referred to in sub-section (3C) of section 211 of the CompaniesAct, 1956.

f. The company is not a sick company within themeaning of section 3(1)(o) of the SICA Act,1985. Hence there is no question of payment ofcess as required under section 441 A ofCompanies Act;

g. As all expenses are treated as Pre-OperativeExpenses to be capitalized, the Company hasnot prepared Profit & Loss A/c;

h. In our opinion and to the best of our informationand according to the explanations given to us,the said Balance Sheet, together with notesthereon, give the information required by theCompanies Act, 1956 in the manner so requiredand give a true and fair view in Conformity withthe accounting principles generally accepted inIndia.


March, 2010.




124


ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’ANNEXURE TO THE AUDITORS’REPORREPORREPORREPORREPORTTTTT(This is the Annexure referred to in our Report of even date)





ii. a. There are no inventories during the year hencethe question of physical verification by themanagement at reasonable intervals does notarise.

b. The company doses not have any inventoriesso the maintenance of records of inventory dosenot arise.

iii. a. The company has taken loan from one partycovered in the register maintained under section301 of the Companies Act, 1956. The maximumamount outstanding during the year was Rs.129,460/-(Previous Year Rs. 111,485/-) andclosing balance as on 31/03/2010 is Rs.129,460/- (Previous Year Rs. 111,485/-).


b. As per information and explanation provided tous, the company has not granted any loanswhich are interest free. However other terms andconditions on which such loans and advancesgiven to Companies, Firms or Other Partieslisted in the Register maintained under section301 are not, prima facie, prejudicial to theinterest of the Company.

c. The Company is regular in repaying the principalamounts as stipulated and has been regular in

the payment of interest wherever applicable





vi. The Company has not accepted deposits from thepublic. Hence, the question of complying the directivesissued by the Reserve Bank of India and the provisionsof sections 58A and 58AA of the Act and the rulesframed there under, where applicable, does not arise.

vii. The paid up capital and reserve and surplus does notexceed 50 lacs as at the commencement of thefinancial year concerned or average annual turnoverdoes not exceed 5 crore rupee for a period of threeconsecutive financial year immediately preceeding thefinancial year concerned, applicability internal auditdose not arise



125


b. Details of disputed liability in respect of taxdues on account of Income Tax, Sales Tax,Service Tax, Custom Duty, Excise Duty, Cesstogether with the status and the Forum beforewhich such dispute is pending as on 31st March2010 is Rs. NIL.















Date: 30th June 2010 Membership No. 32371

126





I SOURCE OF FUNDSSHAREHOLDERS’ FUNDS(a) Share Capital 1 100,000 100,000

100,000 100,000

LOAN FUNDS(a) Unsecured Loans 2 129,460 111,485

129,460 111,485

TOTAL 229,460 211,485

II APPLICATION OF FUNDSCURRENT ASSETS, LOANS & ADVANCES(a) Cash & Bank Balances 3 77,435 77,575(b) Loans & Advances 4 22,425 22,425

99,860 100,000

Less:- CURRENT LIABILITIES & PROVISIONS

(a) Current Liabilities 5 22,060 14,685

22,060 14,685

NET CURRENT ASSETS 77,800 85,315MISCELLANEOUS EXPENDITURE 6 151,660 126,170( To the extent not written off or adjusted)

TOTAL 229,460 211,485


As per our Report of even date For and on behalf of the BoardFor Kirti D Shah & AssociatesChartered Accountants


Place : Mumbai.


127




Rupees Rupees

A) Cash Flow from Operating Activities :-

Net Profit Before Tax and Extraordinary Items - -

Adjustments for :-

Miscellaneous Expenses to the extent not W/Off (0.25) (1.26)

Cash Flow from Operations before Working Capital Changes (0.25) (1.26)

(Increase) / Decrease in Loans & Advances - (0.22)

Increase / (Decrease) in Current Liabilities and Provisions 0.07 0.15


B) Cash Flow from Investing Activities :-

Increase in Share Capital / Share Premium / Reserves - 1.00

Cash Flow from Investing Activities - 1.00

C) Cash Flow from Financing Activities :-

Increase / (Decrease) in Borrowings 0.18 1.11


Net Increase / (Decrease) in Cash & Cash Equivalents ( A+B+C ) (0.00) 0.78

Cash & Cash Equivalents at the Beginning of the Year 0.78 -





Place : Mumbai.


128


SCHEDULES SCHEDULES SCHEDULES SCHEDULES SCHEDULES ANNEXED ANNEXED ANNEXED ANNEXED ANNEXED TTTTTO O O O O AND FORMING PAND FORMING PAND FORMING PAND FORMING PAND FORMING PARARARARART OF BALANCE SHEETT OF BALANCE SHEETT OF BALANCE SHEETT OF BALANCE SHEETT OF BALANCE SHEETAS AS AS AS AS AAAAAT 31ST MART 31ST MART 31ST MART 31ST MART 31ST MARCH,CH,CH,CH,CH, 2010 2010 2010 2010 2010


Rupees Rupees

SCHEDULE 1 - SHARE CAPITALAuthorised500,000 Equity Shares of Rs. 10/- each 5,000,000 5,000,000

5,000,000 5,000,000

Issued, Subscribed and Paid up Capital10,000 Equity Shares of Rs. 10/- each 100,000 100,000(Previous Year 10,000 Equity Shares of Rs. 10/- each )


SCHEDULE 2 - UNSECURED LOANSLoan from Holding Company 129,460 111,485


SCHEDULE 3 - CASH AND BANK BALANCESWith Schedulded Banks on Current A/c 77,435 77,575


SCHEDULE 4 - LOANS & ADVANCESAdvances to Creditors 22,425 22,425


SCHEDULE 5 - CURRENT LIABILITIES & PROVISIONSSundry Creditors(a) For Expenses 22,060 14,685


SCHEDULE 6 - MISCELLANEOUS EXPENDITURE(To the Extent not Written Off or adjusted)Pre-Operative ExpensesBalance B/f 126,170 -Add :- Additions during the Year 25,490 126,170


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SCHEDULE - 7SCHEDULE - 7SCHEDULE - 7SCHEDULE - 7SCHEDULE - 7NOTES TO ACCOUNTS




B. Use of Estimates

The preparation of financial statements inconformity with generally accepted accountingprinciples requires management to makeestimates and assumptions that affect thereported amounts of assets and liabilities andthe disclosure of contingent liabilities on the dateof financial statements. Actual results could differfrom those estimates. Any revision to accountingestimates is recognized prospectively in currentand future periods.

C. All the expenses incurred during theConstruction period or pre operations period willbe accumulated and charged under Preoperative expenses.


a) Fixed Assets to be stated at cost ofacquisition / construction / revaluationless accumulated depreciation

b) Depreciation on Fixed Assets to beprovided on straight line method at therates and in the manner prescribed inSchedule XIV of the Companies Act,1956.

c) On assets acquired during the year andassets sold during the year thedepreciation to be provided pro rata forthe period used.

E. Investments


F. Inventory

a) Raw material, packing materials, Stores,Spares and Stock-in-transit to be valuedat cost.

b) Finished goods to be valued at cost ormarket value whichever is lower. The costto include cost of production and expensesincurred in putting the inventories in theirpresent location and condition.







b) Gratuity will be provided on accrual basisand will be covered under the GroupGratuity Scheme at the appropriate time.

c) All employees are eligible for benefitunder provident fund (PF) scheme.Provident Fund of 12% coveredemployees basic salary plus dearnessallowance wherever applicable isdeducted and paid alongwith company’scontribution of an equal amount on amonthly basis to the governmentadministered provident fund scheme andcharged to profit and loss account.


Basic earning per Share is calculated by dividing

130


the net profit or loss for the year attributable toEquity Shareholders by the weighted averagenumber of equity shares outstanding during theyear.




a) The company will follow provision ofAccounting Standards 11 as prescribed byICAI though there are no Foreign Currencytransactions in the year under review.

b) There are no Current Assets and CurrentLiabilities involving transactions in foreigncurrency in the year under review.




b) The provision for all known liabilities is not in

excess of the amounts consideredreasonably necessary.

c) The balances of Sundry Creditors, and Loansand Advances are subject to confirmation.

3. Leave Encashment

As per the policy of the company, employees arerequired to avail their annual leave by the end of therespective financial year and leave is not allowed tobe encashed and hence no provision is considerednecessary.

4. Contingent liability is generally not provided in theaccounts but is disclosed by way of notes to accounts.

5. Income Tax

Since the company has not commenced thecommercial production the question of any charge forincome tax is not applicable.

Deferred tax assets and liabilities are measured usingtax rates and tax laws that have been enacted orsubstantively enacted on the balance sheet date. Theeffect on deferred tax assets and liabilities of a changein tax rates is recognized in the period that includesthe enactment date.


In view of no commercial operations carried outduring the year there are no deferred tax assetsor liabilities.

7. Related Party DisclosureRelated Party Disclosure as Per Accounting Standard – 18 issued by The Institute of Chartered Accountants ofIndia.

PARPARPARPARPART – T – T – T – T – AAAAA

DETAILS OF RELATED PARTIES (AS PER ACCOUNTING STANDARD 18)


Holding Company Aries Agro Limited Date of becoming Subsidiary of Aries AgroLimited is 20th June 2008 (Incorporation Date)


131






Fellow Subsidiaries Aries Agro Equipments Pvt. Ltd. A Wholly Owned Subsidiary of Aries Agro Ltd.Aries Agro Care Pvt. Ltd. A Wholly Owned Subsidiary of Aries Agro Ltd.Golden Harvest Middle East FZC A Subsidiary Company of Aries Agro Ltd.

Enterprises over which the Key Aries East West Nutrients Pvt. Ltd.Management Personnel have Aries Marketing Ltd.Significant influence or Control Bloosoms International Ltd.




1 Holding company Finance unsecured loans – taken 17,975 111,485

PARPARPARPARPART – CT – CT – CT – CT – CBALANCE OUTSTANDING WITH RELATED PARTIES.

Nature of outstanding Category Name of the party As on 31st March 2010 As on 31st March 2009

Unsecured loans Holding company Aries Agro Limited 129,460 111,485

8. Auditors Remuneration


2010 2009

a. Statutory audit fees 11,030 11,030

b. Tax audit fees - -

c. Taxation matters - -


132


9. Foreign Exchange Earnings & Outflow:

During the year there were no Foreign Exchange earnings, expenditure or outflow.

10. Outstanding Dues of SSI Units

As on 31st March 2010, the Company had no dues outstanding to any small scale Undertakings. There were nodelays to making payment to any creditors during the year and hence the provisions of Interest on Delayed Paymentsto Small and Ancillary unit Act, 1993 are not attracted.

11. (A) Additional Information as per Part II of Schedule VI of the Companies Act, 1956 is as under:



Installed Capacity : Not Applicable

(B) Actual Production : NIL

(C) Quantitative and Turnover information, Consumption of Raw Materials, details of Turnover, Stocks, andProduction etc. are not applicable.





Place : Mumbai.


133








III Position of Mobilisation & Deployment of Funds (Rupees in Lacs)


Sources of Funds :

Paid-up Capital : 01.00 Reserves & Surplus : NIL





Miscellaneous Expenditure : 1.52


Turnover : NIL Total Expenditure : NIL

Profit Before Tax : NIL Profit After Tax : NIL

Earnings Per Share (Rs.) : NIL Dividend Rate : NIL


Item Code No. (ITC Code) : 071080Product Description Farming & Agricultural Produce




Place : Mumbai.


134


4040404040ththththth ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETING ANNUAL GENERAL MEETINGRegistered Office : Aries House, Plot No. 24, Deonar, Govandi, (East), Mumbai-400 043.

AAAAATTENDTTENDTTENDTTENDTTENDANCE SLIPANCE SLIPANCE SLIPANCE SLIPANCE SLIP

Please complete this attendance slip and hand over at the entrance of the Meeting HallL.F. No(s) / DP ID & Client ID.............................................................................................................NAME OF THE SHAREHOLDER .........................................................................................../PROXY..................................................................................................................................................................No. of Shares held : ........................................................................................................................... I / We hereby record our presence at the Fortieth Annual General Meeting held on Friday, the17th September, 2010 at The Acres Club, Hemu Kalani Marg, Chembur, Mumbai – 400 071.

SIGNATURE OF THE SHAREHOLDER / PROXY* ..............................................*Strike out whichever is not applicable__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __

40th ANNUAL GENERAL MEETINGRegistered Office :Aries House, Plot No. 24, Deonar, Govandi, (East), Mumbai-400 043.

PRPRPRPRPROOOOOXY FORMXY FORMXY FORMXY FORMXY FORM

I / We ...........................................................................................................................of ......................................................being the Member / Members of ARIES AGRO LIMITED,MUMBAI, hereby appoint Mr.................................................................................................................of................................................ or failing him Mr........................................................................of .................................................... as my / our proxy to vote for me / us on my / our behalf, at theFortieth Annual General Meeting of the Company to be held on Firday, the 17th September,2010 and at any adjournment thereof.

AffixRe.1/=

RevenueStamp

Signed this .....................................day of ....................................., 2010

Bal Krishak Sambodhan: Awareness Session onBest Practices in Bhola Singh High School - Muzzafarpur

Bal Krishak Sambodhan: Awareness Session onBest Practices in Vidya Mandir High School - Samstipur

All India Chairman’s Club Annual Convention in UAE - April 2010

Aries ISO 9001:2008 Certificate: Upgraded to latest globalstandard of Quality Certificate

Amarak Chemicals FZC, Fujairah: Manufacturing unit to produce 60,000MT per annum of Sulphur Bentonite

Hon’ble Chief Minister of HaryanaShri Bhupinder Singh Hoodainaugurating Agromax at HaryanaAgricultural University Hissar campus - Haryana, 2,500 farmersattended the two day event

Soil testing activity in Bihar -A part of our nationwidemobile soil testing drive, through Aries KVV’s andextension services team.

Mobile soil testing kits in use

Aries Agro kiosk at the weekly market in Jalgaon - Maharshtra

Suryodaya farmers awareness programme - GujaratI